Quality of Earnings Report

CLIENT: Energy-Related Cost Optimization Solutions

Sapling was approached by a buy-out firm. The company was looking for a streamlined quality of earnings/due diligence report to assist in assessing the business opportunity.

3 Key Insights:

We developed a detailed report analyzing various aspects of revenue and expenses, for diligence on the value recognized in financials and their reasonability assessment

The contractual revenues were identified and assessed on individual contract basis to understand the contract terms, re-compute the revenues to be recognized for each of them and the consequent deferred revenues for applicable cases

Incorporated and vetted both seller, and acquirer EBITDA adjustments, in addition to adjustments proposed as part of the due diligence process; which also included multiple discussions with management to investigate variances and clarify EBITDA adjustments

EXAMPLE: Deferred Revenue Proof

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