M&A Talk: #1 Podcast on Selling a Business For New Sellers: Quality of Earnings in M&A Explained in 30 Minutes
10 snips
Jun 30, 2023 AI Snips
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Episode notes
Definition of Quality of Earnings
- Quality of Earnings (Q of E) recasts financial statements to show normalized earnings.
- It removes one-time anomalies and personal expenses for clearer business performance.
Hire QV Firm Early
- Sellers should hire a firm for Q of E before marketing their business.
- This prepares them to answer buyer questions and defend their valuation.
Q of E on Both Sides
- Sell-side and buy-side Q of E reports use the same process.
- Sell-side often includes fixing accounting systems to ease buyer review.