Quality of Earnings Report & Analysis Services in Burlington, Oakville, Hamilton, and across Canada
A Quality of Earnings report provides an overview of the company’s historical and expected future financial performance and offers insight into the operations of the target company, the net working capital needed to run the business, and the risks and uncertainties associated with these earnings.
Business owners need to fully understand the quality of their earnings. Knowing if the company has stable, rising or falling income and what drivers influence these numbers can help maximize the sale price of a business or instill confidence in the numbers when asking for financing from financial institutions and potential shareholders.
Our team of qualified business valuation professionals and chartered professional accountants will work with you to deliver an accurate, independent, and objective report outlining how your company generates earnings and the sustainability of the resulting cash flow. This report will provide context to the overall earnings for the end users, whether it is being used to value the business, obtain financing, or to complete due diligence.
How well do you understand the financial and operational health of your business?
Our Business Valuations experts are able to offer insights into the operations of a business, help understand the net working capital needed to run the business, and the risks and uncertainties associated with these earnings.
What Is a Quality of Earnings Report?
A Quality of Earnings report offers a comprehensive and contextualized review of the financial performance of your organization. They are often required and used in the due diligence process, providing a determination and assessment of the risk and sustainability of the reported earnings of the target company. It does this by examining and analyzing the components that comprise the company’s historical revenues and expenses and the associated risks attributed to both.
What are the Benefits of a Quality of Earnings Report?
Understanding the quality of your earnings is critical for making informed business decisions. Whether you’re preparing for a sale, securing financing, or evaluating investment opportunities, a Quality of Earnings (QoE) report provides essential insights into your company’s financial health.
- Maximizing Sale Price: A strong QoE report validates your asking price, showcasing the stability and sustainability of your earnings to potential buyers.
- Securing Financing: Lenders and investors rely on QoE reports to assess risk and determine the reliability of your business’s cash flow.
- Strategic Decision-Making: Gain a clear, data-backed picture of your financial strengths and weaknesses, helping you optimize operations and drive growth.
- Due Diligence Confidence: Whether buying or selling a business, a QoE report offers an objective assessment of earnings, mitigating risks and ensuring transparency in transactions
What is Included in Our Quality of Earnings Report?
SB Partners delivers a comprehensive and insightful Quality of Earnings report that goes beyond the numbers. The report involves an examination of the operating cash flows, including concentrations and risks, as well as trends and seasonality analysis. This report will also help you minimize the potential issues subsequent to closing the sale of a business.
Our reports provide a detailed analysis of:
- Revenue Recognition: We assess the appropriateness and consistency of your revenue recognition policies.
- Earnings Sustainability: We identify trends and potential risks that could impact future earnings.
- Operating Cash Flow: We analyze your cash flow from operations, including concentrations, trends, and seasonality.
- Working Capital: We evaluate the efficiency of your working capital management and identify potential areas for improvement.
- Balance Sheet Analysis: We examine key balance sheet accounts to identify potential risks and opportunities.
- Corporate Governance & Internal Controls: We review your governance structure and internal controls to assess the reliability of your financial reporting.
- Tax Due Diligence: High-level review of potential tax exposures.
Our Quality of Earnings Team
Get in touch with us
Do you have a question for SB Partners? Need help to understand your business financials or value? We’re here to help with all of your accounting needs, please get in touch today.
Email us at help@sbpartners.ca or give us a call at 905-632-5978 or toll-free at 1-866-823-9990.
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