Search Party When Quality-of-Earnings Reveals Cold, Hard Truths
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Dec 9, 2024 
Bob Boniface, an entrepreneur through acquisition, shares his journey in acquiring TransTech, a CDL training business. Joined by Anthony Walker, an ETA strategy expert, and Ryan Turbes from Boulay, they dive into the vital nature of quality of earnings during acquisitions. They discuss common misconceptions and the emotional dynamics of negotiations. The conversation reveals how crucial this process is in assessing true company value and managing seller relationships while educating clients on the complexities of financial metrics. A must-listen for future entrepreneurs!
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QoE: More Than a Check-the-Box
- Quality of earnings (QoE) is a consulting engagement that uses audit-type testing and pro forma analysis.
- It translates cash accounting to accrual accounting, impacting reported revenue and earnings, and is crucial for deal valuation.
Don't Just Check the Box
- Avoid treating quality of earnings as a mere formality; it provides valuable insights.
- Use QoE to inform your business strategy and working capital management.
Managing Seller Expectations
- Prepare sellers for the QoE process, as it requires sharing sensitive financial information.
- Frame QoE as a collaborative effort to gain an accurate financial picture, not an adversarial process.