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Quality of Earnings

Whether you’re buying or selling a business, performing quality of earnings due diligence is critical to understanding the fine line between potential risk and reward. Our comprehensive financial due diligence services — including quality of earnings analysis, working capital assessment, tax compliance, tax structuring analysis, and purchase price allocation analysis — help you make more informed decisions.

For buyers, we help determine if the seller’s information is accurate. We dig deeper to give you the complete story behind the numbers, assessing the company's historical financial performance and condition, identifying key drivers of trends, and uncovering weaknesses and future growth opportunities. We also help you reduce risk by minimizing your potential tax exposure.

For sellers, we strategize opportunities to maximize the transaction value, identify and remedy potential exposure areas, help prepare management for the acquisition, and expedite the sale process. We look beyond the reported financials and provide insights into earnings, quality of working capital, and liabilities to improve buyer and lender confidence.

Up Next

Critical due diligence considerations

Image for private equity due diligence AoF
4 min read
What IT risks are you inheriting with your acquisition?
If your target meets any of these four criteria, don't skip due diligence.
Doug Hockenbrocht
Article June 16, 2017 4 min read
Ten critical factors to accurately assess your target's growth potential
Daron Gifford
Article October 25, 2016 5 min read
Identify hidden financial and tax risks for your acquisition
Matthew Petrucci
Article October 26, 2016 3 min read
Address these three high-risk areas for a successful acquisition
Dennis Graham
Article October 26, 2016 4 min read

Private equity due diligence guidebook
Tactics to mitigate uncertainties and invest with greater confidence

Quality of Earnings Thought Leadership

  • Revenue recognition and due diligence: Understanding the impact
    For private equity groups, whether buying or selling, the new revenue recognition model could affect the timing of when revenue is recorded, which could have surprising impacts on quality of earnings. Here's what it means for your valuation models during due diligence.
    Christa LaBrosse Lesley McCarthy Andrea Slabinski
    Article October 20, 2017 5 min read
    Image of hands holding pen over clipboard with graph.
  • Private equity integration and value creation guidebook
    Learn seven post-acquisition strategies private equity firms should employ to ensure maximum ROI upon exit.
    Michele E. McHale
    Whitepaper October 02, 2017 14 min read
    Image of man walking up outdoor spiral staircase.
  • Taxable gain exclusion boosts after-tax ROI on qualified investments
    The Section 1202 gain exclusion can increase the net after-tax return on investment for private equity groups and their investors on qualified, C-corporation holdings. Do your C-corp portfolio investments qualify?
    James Minutolo
    Article July 12, 2017 3 min read
    Hanging lightbulbs
  • Sale readiness and the value proposition of seller’s due diligence
    Thinking of selling your business? Careful transaction planning is critical to minimizing the risks and streamlining the transaction process. Use these three steps as your keys to unlock the value within your business.
    Article May 31, 2017 9 min read
    Business woman working with papers

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Our clients say

Plante Moran’s transaction advisory services helped us identify and validate investment opportunities and define and mitigate potential risks, avoiding surprises post-closing. Their audit and tax teams tailor their approach and solutions to ensure our portfolio companies are implementing best-in-class financial reporting practices and proactive tax strategies to optimize after-tax cash flows. Plante Moran’s “one-firm” firm approach is particularly useful for private equity groups like ourselves due to the access to the full resources of the firm, whether it be tax, audit, valuation, or various consulting needs. There’s always someone with the right expertise and experience to respond to our needs.

Richard J. Harpster Managing Director, Svoboda Capital Partners

Our Team

Our financial due diligence team brings you extensive knowledge and M&A expertise. Our multidisciplinary professionals have diverse backgrounds, including traditional audit and tax, corporate management, and investment banking. Our teams also include industry experts based on the specific needs of your transaction. This highly personalized approach ensures you gain the experience, resources, and guidance to lessen uncertainty and maximize transaction value.