Quality of Earnings
Reports for
Business Acquisitions
Close faster with an independent,
objective analysis.
Financial Due Diligence for High-Stakes Business Acquisitions
The Profit Arc provides independent financial analysis and due diligence to help investors, buyers, and business owners understand the financial reality behind a business.
Independent Due Diligence
Get an unbiased assessment of the business’s financial performance, with independent Quality of Earnings analysis designed to meet SBA requirements when applicable and give stakeholders confidence in the numbers.
Business Valuation Insight
Establish a more reliable basis for evaluating valuation and determining whether the proposed price is supported by the company’s normalized earnings and financial performance.
Increase Likelihood of Closing
Provide independent financial analysis that supports discussions with banks, lenders, investors, buyers, and other stakeholders, giving them credible information to evaluate the business, evaluate the risks, and make informed decisions.
Quality of Earnings are Complicated. I Make Them Simple!
A Custom Tailored Approach
There’s only one business in the world like yours. Work with someone that gives you individual attention. We customize our process based on your needs and the size, industry, and type of business.
No Contracts
Sell now or sell later – unlike other M&A firms, The Profit Arc requires no long-term commitments. We’re here to help you either way.
Confidentiality
Confidentiality and security are paramount to a successful transaction and our top priority.
Financial Due Diligence Services
We examine the financial information behind the decision so you can move forward with greater clarity and confidence.
Quality of Earnings Analysis & Report
A third-party analysis of the selling company’s financial records prepared by an independent professional that presents the accuracy, quality, and sustainability of a company’s earnings.
SBA Required QoE
The SBA requires QoEs for initial acquisition and business expansion transactions where the business purchase price is $3 million or more. The threshold is measured before the equity injection and before any seller note, and excludes owner-occupied real estate.
Sell-Side Due Diligence
Sell-side QoE reports are becoming standard for all but the smallest transactions, so not having one puts you at a disadvantage. Obtaining a sell-side QoE report gives buyers confidence in your business, uncovers issues before they become problems, speeds up the transaction process, and is a strong signal to buyers that you’re serious.
Buy-Side Due Diligence
Bjy -side QoE reports facilitates understanding of account balances, cash flows, and other accounting issues that gives a clearer picture of the general operations of the business. The strengths and weaknesses of the business are examined to help the buyer make the most informed decision possible
The Quality of Earnings Analysis Process
QoEs vary based on company’s size, transactions, & management’s comfort level. Starts at $5,000
Preliminary Analysis and Discussion
Preliminary issues are discussed with the management team.
Adjustments to the Financial Statements
Adjustments are made so the financials reflect only the core business activities.
Detailed Analysis
Strengths & weaknesses are examined to help the buyer make the most informed decisions
Final Quality of Earnings Report
The final QoE report presents the accuracy, quality, and sustainability of a company’s earnings.
Results
Quantitative impact delivered.
About Rashida Sigmond
Client Feedback
Rashida has an incredible ability to look at complex financial information and quickly identify what matters. She doesn't just report the numbers—she asks the right questions and gets to the underlying issue.
Her financial analysis gave us a much clearer understanding of our business performance and where the numbers needed further attention. She brought a level of rigor and insight that was invaluable.
Rashida combines strong technical accounting knowledge with real business judgment. She was able to explain complex financial issues clearly and give us the information we needed to make better decisions.
Frequently Asked Questions
When should I start a QoE?+
After the letter of intent is signed
How long does the QoE take?+
The timeline depends on the complexity of the business, the quality of the financial information available, and the scope of the engagement. Timing is established at the beginning of the engagement based on the transaction timeline. However a general ball park is 6-8 weeks.
Should the buyer or seller get a QoE?+
Both buyers and sellers can benefit from a QoE. Buyers use a QoE as part of financial due diligence to validate earnings and assess financial risks before completing a transaction. Sellers can use a QoE to substantiate their financial performance, identify potential issues before going to market, and strengthen their position during the sale process.