FREE GUIDE FOR BUYERSTHE PRE-QOFE UNDERWRITING GUIDE
Find the holes in the seller's numbers before you pay for diligence.
The seven tests my team runs on every deal before a quality of earnings kicks off, the add-backs to push back on, and a worked check on whether the business can actually carry the loan.
- Built for buyers under LOI or close to one
- Six pages you can work through in one sitting
- Free, and yours the moment you submit
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WHAT'S INSIDE
The seven tests we run before every QofE
Most buyers only lightly review the seller's data before the LOI. This first pass shows you where to call it out before you sign, and before the anchoring effect of an LOI makes walking away feel impossible.
01
EBITDA trend
Is EBITDA scaling too fast, is the margin holding steady, and does it match what the industry actually earns?
02
Revenue growth rates
Why a sleepy 30-year-old business suddenly growing 30% a year should make you suspicious.
03
Owner replacement cost
Recast the owner's pay and every hire you'll need to replace the work they do today.
04
Margins and cost structure
What inconsistent gross margins usually tell you about the real EBITDA run rate.
05
Working capital
Why you need to see the balance sheet before the LOI, not after it.
06
Debt service coverage
Recast EBITDA conservatively and check the DSCR before your lender does.
07
Accounting methods
Cash basis or accrual, and why finding out late can blow up the deal.
Also inside: the six add-back types and where each one hides risk, plus a worked example where a 1.33x debt service coverage ratio drops to 0.89x after a first pass.
A LOOK INSIDE
Built to use on a live deal
WHO IT'S FOR
For buyers who want to know before they owe
Who this is for
Searchers, independent sponsors and acquisitive business owners buying a company with $750K to $10M of EBITDA.
What it won't do
A first pass won't catch everything. A real QofE ties the books to bank statements, the general ledger and tax returns, and tests every add-back against the GL. This guide tells you whether the deal is worth paying for that.
FREE GUIDE
Run the first pass before you pay for the full one.
It takes an afternoon, and it can save you a diligence deposit on a deal that was never going to work.
Get the Free Guide