A Quality of Earnings (QoE) analysis is a very useful piece of information in a business transaction. It assesses the quality and reliability of a company’s earnings, based on detailed and rigorous financial analysis.
This analysis makes it possible to identify recurring revenues from those that will not necessarily be repeated in the future as well as the share of profit generated by these recurring revenues. It involves eliminating biases (from management estimates or accounting policies) to obtain an economic value of recurring revenues and the profitability associated with these revenues. It can also identify potential risks associated with the company’s revenues, such as large revenue gaps or excessive payment delays.
In the context of a corporate transaction, the QoE report can be crucial, especially for lenders and investors, who can better understand the financial issues of the transaction and make informed decisions.
At G4 Solutions, we understand the importance of the QoE report and its impact on certain corporate transactions. We have the expertise to assist lenders and investors in this process thanks to our business valuation expert, Hélène Bouchard, who is a certified CBV (member of the Chartered Business Valuators Institute) and has extensive experience in analyzing the quality of earnings of businesses of all sizes.
By working with G4 Solutions and Hélène Bouchard, our clients can obtain a reliable and comprehensive QoE report that will allow them to conduct their transaction with greater confidence.
