Quality of Earnings
We combine an investor’s mindset with the strongest economic and accounting principles to assess quality of earnings and other due diligence measures. Trust us to uncover deal risks as well as hidden opportunities.
We’re professionals who understand business fundamentals. We not only analyze a target company’s financial statements, but we understand the importance of communicating key deal issues that impact the purchase price and capital spending needs after the sale.
Our Quality of Earnings reports go beyond the traditional assessment of the sustainability and accuracy of historical earnings and achievability of future projections. We apply an “investor’s mindset” to build a bottoms-up analysis of key revenue and cost drivers – customer churn, pricing sensitivity, contribution margin analysis – to discover the true enterprise value and to mitigate risk.
We understand the impact that industry trends and a changing competitive landscape may have on your potential investment and will provide expert guidance on the advantages of growth through acquisition.
We combine all of this information and insight to create a scenario analysis tool for the buyer. It determines the value of the company given ranges of assumptions. The tool can also addresses synergy value, not only within the business being acquired, but if the new business will be combined with an existing one. Our scenario analysis tools are interactive models that allow you to alter assumptions, project different outcomes and provide confidence levels as to results.
Business valuation involves evaluating risks faced by business investors. At ValueScope, we think about, analyze and assess those risks from the investor’s perspective. Crucial next steps are to understand the factors that can mitigate the risks.
Our Quality of Earnings analyses go well beyond checking boxes. We ask the critical questions that investors need answered. While these studies are important to prospective buyers, they are valuable to sellers as well. Taking preemptive action to identify problems that investors will take exception to, is smart business. It gives sellers time to resolve potential problems prior to taking their businesses to market.