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Service 02

Quality of
Earnings

Independent assessment of reported earnings to identify non-recurring items and determine true, sustainable EBITDA — the foundation of your deal pricing and lender underwriting.

Our Process

Five Steps to
True Earnings Power

Our QoE reports give buyers and lenders an independent, detailed view of sustainable earnings — stripping out accounting anomalies and seller add-backs that inflate reported EBITDA.

1
Management Interviews & Data Room
Deep-dive discussions to understand accounting policies and underlying business drivers.
2
Revenue & COGS Normalization
Line-by-line analysis to identify one-time items and revenue recognition policy differences.
3
EBITDA Bridge Construction
Clear bridge from reported to adjusted EBITDA, fully supported and documented.
4
Seller Add-back Validation
Independent review of management's proposed add-backs for accuracy and sustainability.
5
Final QoE Report Delivery
Executive summary plus detailed workpapers, delivered within agreed timelines.
95%
of engagements identify material adjustments to reported EBITDA that directly impact deal pricing
3–5×
typical EBITDA multiple impact identified through normalization
100%
of reports independently reviewed before client delivery
48hr
preliminary findings from data room access
300+
QoE engagements completed across industries
EBITDA Bridge

From Reported to True EBITDA

A typical MELCO Advisors EBITDA bridge identifies and quantifies every adjustment between management's reported figures and sustainable earnings.

Reported EBITDA (Management)
$10.0M
Less: Non-recurring revenue
– $2.0M
Less: Unsupported add-backs
– $1.5M
Plus: Validated owner adjustments
+ $0.8M
Adjusted EBITDA (MELCO)
$7.3M

Illustrative example. Actual adjustments vary by engagement.

Get an Independent QoE Assessment

Know what you're buying before you close.

Contact MELCO Advisors → All Services