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Understanding Quality of Earning Reports

Gain a better understanding of what a quality of earnings report means and who needs one.

This course will provide you with an understanding of the process of conducting a quality of earnings engagement and how to conduct this analysis. You will learn how to identify add-backs to earnings, explain financial trends and walk EBITDA forward. You will learn how to use techniques, including trend analysis, common-size analysis, and benchmark analysis, to measure the quality of earnings.

57 minutes
Course Exam
Certificate of Completion
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Process of Quality of Earnings Engagement

  • The Focus on EBITDA as a Measure of Earnings (Earnings Before Interest, Taxes, Depreciation, and Amortization)
  • Quality of Earnings From the Buyer's Perspective
  • Quality of Earnings From the Seller's Perspective

EBITDA Add-Backs

  • Owner Perquisites - What Is a Perk vs. Fair Compensation?
  • Recurring vs. Nonrecurring Income and Expenses
  • Normalizing Start-Up Operations

EBITDA Walk Forward

  • Identify Annual Variances That Impact EBITDA
  • Learn How to Walk EBITDA Forward From One Year to the Next
  • How to Present the Walk Forward in a Meaningful Context

Benchmark Analysis

  • Comparison of Recent Financial Trends to Industry Benchmarks
  • Sources of Benchmarks
  • How to Identify Valid Reasons for Variances and How to Present Them

Trend, Common Size, and Ratio Analysis

  • Understand How Annual Trends Reveal Relationships Between Certain Expenses and Revenue
  • Understand How to Spot Margin Growth and Attrition
  • Understand How Product Mix Impacts the Quality of Earnings
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More Program Information

Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

This course was last revised on January 19, 2022.

Call 1-866-352-9540 for further credit information.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

MP3 Download

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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More Program Information

Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Michele Avery, CPA/ABV, CVA, MAFF

Michele Avery, CPA/ABV, CVA, MAFF

LaPorte CPAs & Business Advisors

  • Director of Forensic and Valuation Services
  • Practice is focused solely on business valuation, including transactions of business interests, litigation issues, and estate matters
  • Regular speaker on business valuation and business transactions for CLE and CPE for attorneys and accountants
  • AICPA Forensic and Valuation Services Section, Louisiana Society of CPAs - Forensic and Valuation Services Committee
  • M.B.A. degree, Louisiana State University; B.A. degree, University of Wisconsin - Superior
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More Program Information

Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 409490
Published 2022
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