A quality of earnings report is a critical step in the due diligence process because it assesses the sustainability and accuracy of historical earnings, as well as the probability of future projections. Great American analyzes a target company’s historical financial statements and comparable data on similar companies to accurately generate a benchmark and forecast earnings potential. A quality of earnings report documents any risks in a company targeted for an acquisition and assesses three distinct lines in a report, including: cash versus non-cash, recurring versus non-recurring, and core business versus external factors.
This type of reporting provides an independent review of the target company and can often uncover risks or liabilities missed in the buyer’s initial assessment. Additionally, it can be used at the board level to provide reassurance that an acquisition is predicated upon sound data. We deliver comprehensive, accurate reports to ensure our clients receive all information that can impact a potential acquisition.