Corporate Finance Advisors
At Minerva Valuations, our Quality of Earnings (QoE) practice delivers rigorous, independent financial due diligence for buyers, sellers, private equity sponsors, and lenders across North America. Conducted by Chartered Business Valuators (CBVs) with deep transaction experience, our QoE engagements go beyond verifying numbers — they surface the true story behind a company's earnings, inform deal structure, and protect value at every stage of a transaction.
In private company transactions, purchase price is typically negotiated as a multiple of EBITDA. The critical question for all parties is: What is the true, sustainable EBITDA of this business? A well-executed QoE report answers that question with the precision and independence your transaction demands.
A Quality of Earnings report is a comprehensive, independent analysis of the reliability and sustainability of a company's reported earnings and cash flows. It examines whether historical results accurately reflect the underlying economic performance of the business — and whether those results are likely to persist under new ownership.
QoE reports are used across the transaction lifecycle: by buyers to validate the purchase price, by sellers to strengthen their market position, and by lenders and investors to assess financing risk. No two QoE reports are identical — our CBVs tailor each engagement to the specific nature of the transaction and the priorities of the client.
Request a Confidential ConsultationOur QoE reports are structured around the following pillars, with scope tailored to match the complexity and stage of each transaction.
Identify and adjust for non-recurring, discretionary, non-operational, and non-cash items — including above-market owner compensation, one-time settlements, related-party transactions, and inconsistent accounting policies — to arrive at a reliable, normalized EBITDA baseline.
Construct an accurate TTM EBITDA by smoothing year-end journal entries, accruing stub-period adjustments, and assessing whether recent performance genuinely represents post-closing run-rate earnings. We challenge the assumption that historical results equal future performance.
Evaluate revenue at the product, customer, and segment level — identifying concentration risks, revenue recognition policies, contract terms, pricing trends, and the sustainability of top-line growth or potential retraction.
Analyse cash conversion efficiency, working capital cycles, seasonality, and adequacy of current working capital to identify potential volatility and inform locked-box or working capital peg negotiations.
Assess consistency of accounting policies across periods and identify deviations from GAAP or ASPE that may distort earnings comparability or inflate reported profitability, including inventory, revenue recognition, and accrual methods.
Present a clear walk from reported net income to adjusted EBITDA, providing transparency for negotiations and SPA financial definitions — while surfacing red flags such as aggressive accounting, customer attrition, or underreported liabilities.
Whether you are acquiring a business or preparing to sell one, Minerva delivers QoE analysis designed to protect and maximize value for your side of the transaction.
For acquirers — whether strategic buyers, private equity firms, or family offices — our buy-side QoE provides an independent, forensic view of the target's financial performance before signing. We help buyers validate investment assumptions, avoid overpayment, and negotiate from a position of strength.
For business owners preparing to sell, a proactive vendor QoE is one of the most powerful steps you can take to maximize value and reduce deal friction. We work with owners of businesses valued between $500K and $30M to ensure they enter the market with full command of their financial story.
Sellers who commission a vendor QoE before going to market consistently experience better outcomes. Here is what the difference looks like.
| Without a Sell-Side QoE | With a Minerva Sell-Side QoE |
|---|---|
| Buyers conduct their own diligence — and often find issues you did not anticipate | Seller controls the financial narrative from day one |
| Surprises discovered in diligence lead to price reductions and retrades | Adjusted EBITDA is pre-validated, transparent, and defensible |
| Prolonged exclusivity periods erode seller leverage | Higher buyer confidence leads to stronger initial bids |
| Buyer demands for escrow holdbacks or purchase price adjustments | Shorter due diligence periods and faster close timelines |
| Risk of deal collapse late in the process after significant time invested | Reduced risk of price chipping, escrow demands, or deal collapse |
Every engagement follows a disciplined, phased approach — scoped to the size and complexity of the transaction and the priorities of the client.
Preliminary scoping — review of CIM, management accounts, and available financial statements to define engagement scope and priorities.
Data request & data room review — systematic collection and review of financial records, accounting policies, contracts, and supporting schedules.
Management interviews — structured sessions with finance leadership to understand business drivers, accounting judgments, and operational context.
Historical analysis & TTM construction — EBITDA normalization, stub-period smoothing, and identification of all adjusting items across two to three years of results.
Revenue, cash flow & working capital review — customer-level analysis, receivables trends, inventory, and working capital adequacy assessment.
Draft report & discussion of findings — delivery of findings for client review, with discussion of material items and their transaction implications.
Final QoE report — delivered in a format ready for use in LOI or SPA negotiations, lender presentations, and investment committee submissions.
"A strong QoE report doesn't just inform the deal — it helps ensure the deal you negotiated is the one that gets signed and closed."
Chartered Business Valuator, CBV Institute"In our experience, sellers who come to market with a credible, CBV-prepared Quality of Earnings report consistently achieve a higher multiple and significantly faster lender approval than those who don't. It is one of the single highest-return steps a business owner can take before entering a sale process."
Abhi Mathews, CBV — Founder & Managing Director, Minerva ValuationsQuality of Earnings reports can be prepared by a range of financial advisors — but not all QoE providers deliver the same depth, rigor, or deal relevance. At Minerva, every engagement is led by a Chartered Business Valuator (CBV), Canada's only designation dedicated to business valuation.
| What Sets Minerva Apart | Why It Matters for Your Transaction |
|---|---|
| CBV Designation | Canada's leading business valuation designation — brings valuation rigor, not just accounting compliance, to every QoE engagement. CBVs bring an integrated perspective covering forensic analysis, forecasting, and transaction advisory. |
| Investment Banking Background | Senior Minerva professionals have executed M&A transactions on the TSX, TSX-V, NYSE, and OTC markets — we understand deal mechanics and negotiation dynamics, not just financial statements. |
| Cross-Border Expertise | We serve clients across Canada and the United States, with offices in Toronto, Dallas, Miami, and Los Angeles — providing consistent diligence standards and seamless coordination across jurisdictions. |
| 25+ Industries | Our team has valued, structured, and due diligenced over 100 transactions in North America — we know what buyers look for, and we help sellers prepare for it. |
| Middle Market Specialists | We specialize in businesses valued between $500K and $30M — the segment where independent, expert QoE analysis creates the greatest impact on deal outcomes and where many large firms do not focus. |
| Integrated Advisory Platform | A Minerva QoE integrates seamlessly with our full M&A advisory, business valuation, and litigation support platform — ensuring consistency of financial analysis from pre-sale planning through to close. |
Our Quality of Earnings practice serves a broad range of clients across the full transaction lifecycle.
Business owners preparing for a sale or recapitalization who want to enter the market with a credible, pre-validated financial story.
Private equity firms, family offices, and strategic acquirers conducting buy-side financial due diligence on acquisition targets.
Banks and alternative lenders assessing acquisition financing who require independent comfort on the reliability of a borrower's earnings.
Sponsors evaluating platform or add-on acquisitions, or preparing portfolio companies for exit, requiring rigorous earnings analysis.
Directors evaluating divestitures, restructurings, or strategic alternatives who need an independent view of the company's financial position.
Investment bankers and legal counsel seeking independent QoE analysis to support and strengthen the transaction process for their clients.
Whether you are preparing your business for sale, evaluating an acquisition, or seeking independent financial clarity ahead of a financing event — Minerva Valuations delivers Quality of Earnings analysis you can rely on.
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