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Quality of Earnings Support for Sell-Side Readiness
About
Strengthening sell-side readiness through targeted Quality of Earnings review, GL cleanup, and due diligence support.
A middle market company engaged Taylor White to strengthen its sell-side readiness with a focused Quality of Earnings (QoE) review. The internal accounting team was lean, and the Controller had limited experience preparing QoE adjustments.
Our Solutions Director partnered with the client to clean up the general ledger, identify and document QoE adjustments, reconcile reported EBITDA to Adjusted EBITDA, and provide hands-on support throughout the transaction process.
Problem
Limited Internal Experience With QoE Requirements
The client’s accounting function was lean and not equipped to perform a robust QoE analysis. Management lacked clarity on which transactions required adjustments, how to document them, and how to present Adjusted EBITDA to potential buyers.
Goal
Prepare Accurate, Defensible QoE Adjustments
The objective was to review general ledger activity, identify transactions that required QoE treatment, and translate them into clear, well-supported adjustments. Management needed schedules and narratives that would stand up to buyer due diligence and support a credible sell-side story.
Solution
Targeted GL Review, QoE Documentation, and Transaction Support
Taylor White deployed a Solutions Director to perform detailed GL cleanup, interview management on key transactions, prepare write-ups explaining each adjustment, reconcile reported EBITDA to Adjusted EBITDA, and propose additional entries based on experience from similar QoE engagements.
Structured QoE Assessment and Sell-Side Preparation
We guided the engagement through a structured three-part approach that combined technical accounting analysis, clear documentation of QoE adjustments, and on-the-ground support during buyer due diligence.
Phase 1
Prepared detailed write-ups explaining each QoE adjustment, including rationale and period impacted
Highlighted accounting areas where treatment would change under a public-company environment
Built a high-level reconciliation from reported EBITDA to Adjusted EBITDA
Leveraged prior engagement experience to propose additional adjustments management had not previously considered
Phase 2
Process Redesign and Standardization
Implemented consistent reporting cadence across entities
Introduced a centralized chart of accounts and reconciliation templates
Improved forecasting accuracy and investor reporting efficiency
Phase 3
Transaction and Due Diligence Support
Provided the QoE outputs for inclusion in the management presentation to potential buyers
Served as a key member of the due diligence team on a consulting basis
Managed and prioritized incoming information requests and follow-up questions from suitors
Result
Defensible Adjusted EBITDA and Streamlined Due Diligence
The QoE analysis equipped the client with a clear, defensible bridge from reported EBITDA to Adjusted EBITDA, supporting a stronger sell-side narrative. Buyers received well-documented adjustments and could quickly understand the underlying performance of the business.
With organized GL data, documented QoE entries, and direct advisory support during diligence, the company reduced friction in the transaction process and improved confidence among potential suitors in the quality of its financial information.
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