Gain a better understanding of what a quality of earnings report means and who needs one.
This course will provide you with an understanding of the process of conducting a quality of earnings engagement and how to conduct this analysis. You will learn how to identify add-backs to earnings, explain financial trends and walk EBITDA forward. You will learn how to use techniques, including trend analysis, common-size analysis, and benchmark analysis, to measure the quality of earnings.
Learning Objectives
- You will be able to define working capital adjustments.
- You will be able to describe contents of a QOE Report.
- You will be able to explain normalization adjustments.
- You will be able to identify nonrecurring income or expenses.
Agenda
QOE Objectives
- Establish Normalized EBITDA
- Identify Non-Operating or Excess Assets
- Establish Net Working Capital Target
Contents of QOE Reports
- Cash Proof of Revenue
- Quality of Earnings Analysis
- Financial Statement Analysis
- Working Capital Analysis
QOE Analysis
- Identify Adjustments
- EBITDA Bridge
- Re-Casted Income Statement
Financial Statement Analysis
- Common Size Analysis
- Trend Analysis
- Variance Analysis
Working Capital Analysis
- Accounts Receivable Quality
- Inventory / Payables
- Establishing Working Capital PEG