As the acquirer in an M&A transaction, how do you get comfortable with the quality of the target’s earnings?
As a target, how do you demonstrate to the acquirer that your earnings are sound, and that the buyer is getting what they’re paying for?
Here’s where the QoE (Quality of Earnings) comes into play.
In the sale of a private company, there are many areas where work is required during the process, but I’d list the QoE as one of the top three investments that will handily pay off.
Here’s a primer about this QoE process, and how it fits into the overall deal.