QoE That Helps You Decide - Not Just Document

QoE That Helps You Decide — Not Just Document

The most important question in any acquisition isn’t what the company earned last year; it’s whether those earnings will survive the transaction and grow in the future.

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Most CPA-prepared Quality of Earnings reports focus primarily on analyzing historical financial statements and accounting adjustments. 

For investors, the more important question is: How will this asset perform after the transaction?

At True North CFO, we believe a Quality of Earnings analysis should help investors determine not only whether the current valuation is supported by historical performance, but whether that valuation is likely to survive the transaction and grow as anticipated.

Independent Sponsors and emerging Private Equity groups often operate without large internal diligence teams. Our approach supports the smaller transactions and goes beyond the traditional CPA checklist to focus on what truly matters in a transaction: sustainable earnings, cash generation, and the operational drivers of value.

We analyze the entire transaction, both past and future, to ensure forward-looking assumptions are realistic, supportable, and achievable.

Our Quality of Earnings Approach

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Transaction-Focused Analysis

While we provide a traditional GAAP-based historical QoE review, we also evaluate earnings within the context of the investment thesis and deal structure to ensure the valuation is sustainable post-close.

Sustainable EBITDA

We identify the true operating performance of the business by separating sustainable earnings from temporary, owner-specific, or non-recurring items.

Cash Conversion & Working Capital Reality

In lower middle-market transactions, working capital often does not transition at closing as forecasted. We evaluate the practical realities of working capital needs to minimize post-close surprises.

Operational Drivers of Profitability

We analyze revenue quality, customer concentration, pricing power, margin sustainability, and other key drivers of long-term performance.

Forward-Looking Perspective Historical performance is only the starting point. We evaluate whether profitability is repeatable and scalable with realistic post-transaction forecasts.

Independent Sponsor Friendly

Efficient Diligence support designed for smaller deal teams and accelerated timelines.

Cost EfficientOur reporting structure is designed specifically for Independent Sponsors and emerging Private Equity groups, delivering actionable insights at a substantially lower cost than traditional QoE engagements.

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The Result

A Quality of Earnings process that Partners with you and helps investors determine whether the valuation is supported by both historical performance and future cash generation.

True North CFO - True North CFO supports Independent Sponsors and lower middle market Private Equity groups with transaction diligence, financial leadership, and post-acquisition value creation.

Our Three-Tier Approach:

• Pre-Transaction Support

• Transaction Support

• Post-Transaction Growth Support

Visit us for a more detailed approach: www.truenorthcfos.com

Contact us to discuss your next transaction!