Quality of Earnings
Reported EBITDA is an opening position. BD Emerson tests the revenue, normalizes the earnings, and documents every adjustment, so the number that closes the deal is one both sides' advisors can defend.
A quality of earnings report tests whether reported EBITDA reflects earnings a buyer can expect to keep after closing. The analysis rebuilds monthly revenue on a consistent basis, removes items that will not recur, and reports adjusted EBITDA with every adjustment traced back to the general ledger. BD Emerson runs buy-side and sell-side engagements as a CPA firm, and the same team handles tax, technology, and cyber diligence, so the findings reconcile to one model instead of four vendors' reports. Start with what a quality of earnings report covers and the EBITDA adjustments guide.
Nine workstreams make up a BD Emerson quality of earnings engagement. Buy-side and sell-side scopes run the same testing, and the deliverable is a written report with an Excel databook behind it: monthly adjusted EBITDA, a net working capital analysis, a net debt schedule, and every adjustment with its support.
We set the review period, the entities in scope, and the deliverable on the first call, then issue a data request covering trial balances, general ledger detail, bank statements, customer detail, contracts, and payroll. Work starts when accounting system access or the data room is live.
Bank activity is reconciled to the general ledger month by month before any earnings analysis begins. If the recorded results do not tie to the bank, every number built on top of them is unreliable, so this comes first.
Revenue is tested for recognition basis and cutoff, then cut by customer, product, and channel. Gross margin is walked month over month so price, volume, and mix are separated rather than blended into a single line the seller can explain away.
Every proposed adjustment gets an amount, a support reference, a recurring or non-recurring flag, and an assessment of whether the other side will accept it. The draft schedule reaches the deal team in week two or three, before the report is written.
We build the twelve-month normalized net working capital average that sets the peg, then schedule the debt-like items that reduce cash at closing. Both feed the purchase agreement directly.
The deliverable is a written report with an Excel databook behind it: monthly adjusted EBITDA, the adjustment schedule with support, net working capital, net debt, and customer detail. Both sides' advisors can test it line by line.
We stay on the file after delivery to answer the other side's questions, walk lenders through the numbers, and support the working capital true-up after closing.
BD Emerson performs SOC 2 examinations directly through its CPA attest arm. The quality of earnings report is issued by the firm that did the testing, which is what lenders and buy-side counsel ask for when they check who stands behind the numbers.
Financial, tax, technology, and cyber diligence run from the same firm, so the working capital peg, the tax exposure, and the technology spend land in one model instead of four vendors' reports that contradict each other in week five.
Every adjustment carries an amount, a source document, and a clear read on whether it will be accepted. Adjustments that cannot be supported get flagged in the draft, before they cost credibility in negotiation.
The practitioners who scope the engagement do the testing. Draft findings arrive in week two or three, and the same team stays available through the working capital true-up after closing.
Great consulting firms for scaling security, compliance, and appsec.
.avif){kind=small}
Outstanding partner in Technical and Cyber Due Diligence
.svg){kind=small}
Appsec maturity and application hardening.
.avif){kind=small}
BD Emerson helped us simplfiy our compliance management.
BD Emerson did such a phenomenal job. What started as privacy support quickly became a full partnership across compliance, engineering, and even business operations. They’re embedded with our team. They understand our product. They move fast. They’re simply invaluable.
Great consulting firms for scaling security, compliance, and appsec.
Outstanding partner in Technical and Cyber Due Diligence
Appsec maturity and application hardening.
BD Emerson helped us simplfiy our compliance management.
BD Emerson did such a phenomenal job. What started as privacy support quickly became a full partnership across compliance, engineering, and even business operations. They’re embedded with our team. They understand our product. They move fast. They’re simply invaluable.
We had a hard time finding the right company to partner with in support of our compliance journey. Some vendors sell the idea that they do the work, but then you end up doing everything. The ambiguity is what killed our last project. BD Emerson’s team has such great technical knowledge and understands the standard so well that they made us comfortable with moving fast. This has led to us closing major enterprise customers that were previously out of reach because of security and compliance.
Lead an enterprise initiative to overhaul the organization's technology stack from ecommerce, corporate tech, and corporate security.
Supported ISO 42001 exercise and served as internal auditor.
Rubrik's privacy and compliance team began with the backbone of BD Emerson. BD Emerson supported building out the privacy program, GRC (ISO 27001, SOC 2, CMMC, FedRAMP), and the appsec function.
We needed a partner who could move quickly, without sacrificing precision. BD Emerson brought the expertise, structure, and speed we were looking for. Their team became an extension of ours, embedding themselves across the organization, guiding us step by step, and giving us confidence in areas we hadn’t tackled before. The internal audit they conducted was so detailed that even the external auditors called it out. Achieving ISO 27001 with zero nonconformities says everything you need to know about the quality of the partnership.
We had a hard time finding the right company to partner with in support of our compliance journey. Some vendors sell the idea that they do the work, but then you end up doing everything. The ambiguity is what killed our last project. BD Emerson’s team has such great technical knowledge and understands the standard so well that they made us comfortable with moving fast. This has led to us closing major enterprise customers that were previously out of reach because of security and compliance.
Lead an enterprise initiative to overhaul the organization's technology stack from ecommerce, corporate tech, and corporate security.
Supported ISO 42001 exercise and served as internal auditor.
Rubrik's privacy and compliance team began with the backbone of BD Emerson. BD Emerson supported building out the privacy program, GRC (ISO 27001, SOC 2, CMMC, FedRAMP), and the appsec function.
We needed a partner who could move quickly, without sacrificing precision. BD Emerson brought the expertise, structure, and speed we were looking for. Their team became an extension of ours, embedding themselves across the organization, guiding us step by step, and giving us confidence in areas we hadn’t tackled before. The internal audit they conducted was so detailed that even the external auditors called it out. Achieving ISO 27001 with zero nonconformities says everything you need to know about the quality of the partnership.
BD Emerson didn’t just help us meet our compliance goals; they integrated security and privacy into the core of our operations. I highly recommend BD Emerson to anyone seeking SOC 2 or GDPR compliance, or simply looking to enhance their security team and boost customer trust in their product and services. Their dedication and expertise have been invaluable to our success.
.avif){kind=small}
BD Emerson understood our business requirements and worked side-by-side with us. The policies and controls we developed together not only meet compliance standards but improve how we operate day to day.
.avif){kind=small}
From day one, BD Emerson brought urgency, clarity, and a sharp understanding of what truly matters to our business — earning and keeping customer trust. They went beyond helping us meet compliance requirements; they helped build a foundation for secure, scalable growth. That kind of partnership is rare.
BD Emerson didn’t just help us pass an audit—they helped us build a sustainable culture of security.
BD Emerson was essential in helping our company navigate the daunting process of leveling up our security infrastructure. BD Emerson’s impressive expertise and confidence throughout the process helped our team exceed HIPAA and SOC 2 Type 1 standards quickly, distilling what can be an overwhelming process into a streamlined, organized effort. From day one they began adding value and getting us on course. With their help we delivered on a massive security overhaul with both extreme efficiency and thorough attention to details. Because of BD Emerson’s support, we’ve increased our clients’ trust in Titan Intake and the life-changing work it accomplishes for those seeking specialist referrals.
BD Emerson didn’t just help us meet our compliance goals; they integrated security and privacy into the core of our operations. I highly recommend BD Emerson to anyone seeking SOC 2 or GDPR compliance, or simply looking to enhance their security team and boost customer trust in their product and services. Their dedication and expertise have been invaluable to our success.
BD Emerson understood our business requirements and worked side-by-side with us. The policies and controls we developed together not only meet compliance standards but improve how we operate day to day.
From day one, BD Emerson brought urgency, clarity, and a sharp understanding of what truly matters to our business — earning and keeping customer trust. They went beyond helping us meet compliance requirements; they helped build a foundation for secure, scalable growth. That kind of partnership is rare.
BD Emerson didn’t just help us pass an audit—they helped us build a sustainable culture of security.
BD Emerson was essential in helping our company navigate the daunting process of leveling up our security infrastructure. BD Emerson’s impressive expertise and confidence throughout the process helped our team exceed HIPAA and SOC 2 Type 1 standards quickly, distilling what can be an overwhelming process into a streamlined, organized effort. From day one they began adding value and getting us on course. With their help we delivered on a massive security overhaul with both extreme efficiency and thorough attention to details. Because of BD Emerson’s support, we’ve increased our clients’ trust in Titan Intake and the life-changing work it accomplishes for those seeking specialist referrals.
