Don't feel ashamed…If I didn’t work in M&A accounting, I wouldn’t know either.

Most tax accountants don’t know.

Here’s the breakdown of a QoE report so you don’t lose out:

  1. Quality of earnings

Revenue and EBITDA are adjusted to be closer to their actual value. This means taking out one-time expenses and revenues. And a bunch of other stuff the seller or broker (or banker) added that doesn’t make sense for you.

  1. Balance sheet analysis

The balance sheet helps you understand what you are buying at a snapshot. It not only gives you an overview on everything the business owns and owes, but also gives you valuable insights on some of the key concerns.

Is the company paying its vendors on time? Where is the typical collection terms for the receivables? Are there uncollectible accounts that need to be written off? What does cash conversion cycle look like? Has the company accounted for all assets and liabilities properly? Are there off-balance sheet assets and liabilities?

Again, you want to make sure you understand what you are buying.

  1. Proof of Cash

Answers your question on how much a business REALLY makes. Makes sure that cash balances are real and properly documented.

  1. Net working capital

Short-term assets and liabilities on hand is the definition you’ll find on Google, but you need to know more than that to have enough cash at close to run the business.

Your money buys more than just the stamp of approval.

It buys your sleep at night. It puts away any concerns you might have. It’s a must for any business owner who cares about their health.