A sell-side quality of earnings (QoE) report is a critical tool in facilitating a seamless and efficient business acquisition. Prepared by well-established third-party professional services firms, this report brings key advantages to the table for sellers looking to ensure a smooth sales process.

Enhance credibility

Enhancing credibility is a fundamental benefit of a sell-side QoE. It instills trust among potential buyers by providing a third-party validation of a company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and net working capital. The accuracy and transparency demonstrated in this report bolsters the reliability of the financial data and facilitates smoother negotiations. By presenting adjusted earnings clearly and with supporting documentation, sellers can convincingly assure buyers of the business's robust financial health.

Identify issues early in the sales process

Moreover, a sell-side QoE is instrumental in identifying and addressing issues that may not be immediately apparent from the company’s financial statements. This proactive identification allows sellers to rectify any financial or operational discrepancies before they escalate into serious concerns that could affect the deal. Addressing these issues not only preserves the business’s valuation but also enhances its operational efficiency, making it more attractive during sales negotiations.

Maximize efficiency

Another significant advantage of the QoE report is its ability to speed up the sales process. The report provides a comprehensive, pre-vetted financial analysis right from the start, reducing the time buyers need to conduct their own due diligence. This streamlining of processes leads to quicker decision-making and minimizes transaction delays, which ultimately facilitates faster deal closures.

A sell-side quality of earnings report is indispensable for enhancing credibility through third-party verification of financial statements, which builds trust and transparency with potential buyers. It also plays a crucial role in identifying and rectifying any underlying issues early on, thereby preserving the business’s valuation. By providing detailed, pre-validated financial insights, this report significantly expedites the sales process, streamlining buyer due diligence and enabling quicker transaction closures.

Citrin Cooperman’s dedicated Transaction Advisory Services Practice’s team is well-equipped to help your business successfully navigate due diligence matters. For more information, please contact Sylvie Gadant at sgadant@citrincooperman.com, Logan Jones at ljones@citrincooperman.com, or your Citrin Cooperman advisor.