Quality of Earnings (QoE) Review Services

Johnson Lambert provides quality of earnings reviews to insurance and related entities engaging in mergers and acquisitions (M&A). Our services are designed to assist clients on both the buy-side and sell-side of a transaction. A QoE report helps buyers assess an acquisition target's financial health and due diligence concerns. For sellers, a QoE review provides a clearer understanding of your own business's financial position, which can help prepare you for the due diligence process and streamline the transaction.

Buying, Selling, or Investing?

Evaluate and Assess Your Transaction

Navigating a transition in your company’s structure requires expert financial insight. Johnson Lambert provides guidance for both buy-side and sell-side quality of earnings reviews.

Whether you’re considering a strategic acquisition to expand your business or looking to divest a business unit, a QoE review and the final QoE Report are essential for structuring and executing the optimal deal. This analysis provides a deeper understanding of a company’s true earning potential and can help mitigate financial risks. A QoE report is a key component of the M&A due diligence process.

Johnson Lambert’s QoE expertise centers around the deals made by and for insurance companies and insurance related entities. Our specialized insurance practice translates to greater insights for our clients, positioning them to be more comfortable with the forward-looking position of the company being analyzed and reducing risk in the deal.

Key Components

Quality of Earnings Analysis

When we perform a quality of earnings review, we assess several critical dimensions to ensure full transparency and reliability in the financial profile of a business, including:

Consistency and quality of the company’s accounting policies
Observations regarding the quality of the company’s internal controls over financial reporting
Degree of judgment or subjectivity in developing accounting estimates
Completeness and transparency of the financial statement footnotes, including uncertainties and contingencies
Volume and significance of non-recurring transactions
Impact of related party transactions on earnings
Tax positions taken by the company

Consulting

Services We Offer

Buy-Side Due Diligence

Sell-Side Due Diligence

From selling your company to increasing the scalability of your service offerings, our extensive insurance expertise allows our team to deliver right-sized engagements that are customized to meet your unique needs as you go through this transition.

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