Our services...

Quality of Earnings (QoE) and Quality of Working Capital (QWC) Assessments

Sophisticated Financial Modeling. Scalable Due Diligence. Affordable Insight.
Nelson Business Financial (NBF) specializes in practical, cost-effective financial due diligence and transaction advisory services for lower middle market acquisitions, with particular emphasis on transactions ranging from $1 million to $20 million.
Report Sample
image
Our approach combines more than 30 years of hands-on financial analysis, M&A advisory, and transaction support with proprietary financial modeling and AI-enhanced analytical capabilities. The result is a more comprehensive understanding of an acquisition target's historical financial performance, future prospects, and investment risks—delivered efficiently and economically. Quality of Earnings and Working Capital Analysis A Quality of Earnings (QoE) assessment evaluates the reliability and sustainability of a company's reported earnings. Going beyond traditional financial statements, it examines underlying earnings drivers, accounting practices, nonrecurring items, potential adjustments to EBITDA, cash flow, and financial risks that may affect valuation, financing, and acquisition decisions.
Quality of Working Capital (QWC) analysis complements this assessment by examining historical working capital trends, operating liquidity requirements, and potential adjustments that may affect the purchase price and post-acquisition cash requirements.
Unlike a financial statement audit, a QoE assessment does not provide audit-level assurance. Its scope and rigor are tailored to the transaction, taking into consideration the availability and reliability of financial information, access to management, the buyer's objectives, budget, and timeframe.
Flexible Engagement Options — Rapid QoE and Comprehensive QoE
Recognizing that traditional financial due diligence engagements can be prohibitively expensive for smaller acquisitions, NBF has developed proprietary tools and processes that enable us to offer two scalable engagement options:
Rapid QoE: An economical, streamlined assessment that combines historical earnings analysis with our fully integrated, 60-month financial projection and transaction model. Utilizing available financial information and reasonably supported operating assumptions, Rapid QoE helps buyers identify material earnings adjustments, financial risks, cash flow requirements, and potential acquisition feasibility issues without the expense of a more exhaustive investigation.
Comprehensive QoE and QWC: A more rigorous financial due diligence engagement incorporating deeper analysis of historical earnings, working capital, cash flow, and financial performance, together with more granular operating assumptions, expanded supporting research, corroboration, and scenario analysis. The resulting assessment provides a more thoroughly substantiated foundation for valuation, financing, negotiation, and investment decisions.
Both engagement options include NBF's proprietary, integrated 60-month financial projection and transaction model. The principal distinction is the depth of investigation, granularity of assumptions, and rigor applied to collecting, developing, documenting, and validating the underlying financial and operating data—not the sophistication of the modeling tools provided.
Proprietary Financial Modeling and AI-Enhanced Analysis
Over the past three decades, NBF has invested thousands of hours developing and refining proprietary financial modeling tools and analytical processes that significantly expand what can be accomplished within the budget and timing constraints of lower middle market transactions.
A distinguishing feature of our QoE work product is the inclusion of a detailed, 60-month, unit-based financial projection and fully functioning Excel transaction model that incorporates the target company's operating economics, contemplated acquisition, proposed capital structure, and buyer's business plan.
Unlike static, high-level financial forecasts, our integrated model enables detailed cash flow projections, debt service analysis, sensitivity testing, and evaluation of alternative operating and financing scenarios. Highly refined modeling processes allow us to deliver these capabilities with minimal incremental effort, making sophisticated forward-looking analysis available even within our Rapid QoE engagements.
We further enhance our analytical capabilities through the extensive use of AI-assisted economic, industry, competitive market, and valuation research. By integrating these broader perspectives with transaction-specific financial analysis, we help buyers evaluate not only the quality and sustainability of historical earnings but also the assumptions, opportunities, and risks underlying future financial performance.
Our AI-enhanced toolkit increases analytical reach and efficiency while experienced professional judgment, financial reconciliation, and appropriate validation of underlying information remain central to our conclusions.
Experienced Guidance. Right-Sized Solutions.
NBF understands the challenges facing acquisition entrepreneurs, independent sponsors, and lower middle market investors. Our objective is to deliver meaningful, decision-ready financial insights that help buyers identify risks, assess opportunities, evaluate transaction feasibility, and negotiate with greater confidence—without incurring unnecessary expense.
Whether you need a streamlined Rapid QoE assessment or comprehensive financial due diligence, we tailor the engagement to your acquisition, budget, and timeline.
Considering an acquisition? We welcome the opportunity to discuss your project and help determine the appropriate level of due diligence for your needs.
Contact Joshua Nelson directly for a no-obligation consultation.
Joshua NelsonPrincipal | Nelson Business Financial, LLCjnelson@nelsonbusiness.com262-427-1249

Corporate Recovery

Our corporate recovery service is comprehensive in scope, pulling together the crisis and turnaround management, budgeting, 13-week cash flows, strategic planning, valuation, M&A, negotiating, and capital sourcing services necessary to rehabilitate troubled businesses.
  • Budgets & Forecasting
  • 13-week Cash Flow Management
  • KPI Analysis
  • Operational Turnaround
  • Financial Engineering
image

Financial Planning & Analysis

We have invested hundreds of hours in developing CFO, a comprehensive toolkit for executing tasks frequently performed by the finance function. Our core technology raises the bar for what can be delivered within tight time frames and budgets.
  • Dashboards, Scorecards, KPIs
  • P&L, Balance Sheet, Cash Flow Forecasts
  • Decision Support Analysis
  • Monitor progress and measure effectiveness of the company's strategic plan and investments
image

Financial Modeling

We endeavor to stay on the cutting edge of the latest technologies and adhere to industry best-practices in delivering our work product. The result is a work product delivered on time, within budget, and that meets or exceeds client expectations.
  • Advanced Excel and Microsoft 365 skills
  • Models that are easy to understand
  • Automate data capture from your enterprise system
  • Analyze and identify data required to support model tracking
  • Identify key financial and non-financial risks and advise mitigants for those risks
image

Corporate Finance

NBF offers a complete back-office financial advisory service for companies seeking to secure debt financing, raise equity capital, and buy or sell their businesses.
  • Quality of Earnings (QoE) and Quality of Working Capital Assessments
  • Strategies to maximize financing net worth
  • Feasibility studies
  • Pre-acquisition reviews
  • Fnancial modeling
  • M&A due diligence
  • Strategic planning
  • Business valuations (as client advisors in connection with a transaction)
  • Finding capital.
image

Strategic Planning

Our planning process was developed from the work of two of the foremost planning specialists in the country: David A. Aaker, the E.T. Grether Professor of Marketing Strategy at the Haas School of Business Administration at the U of C and author of Developing Business Strategies; and Philip Walcoff, President of PWI Business Solutions and author of the Fast Forward MBA in Business Planning for Growth.
  • Develop plans to materialize strategy and analyze business proposals
  • Research competition to identify threats and opportunities
  • Assess the company’s operational and strategic performance
  • Align processes, resources-planning and department goals with overall strategy
  • Provide support and insight into significant organizational changes (e.g. shift in strategic focus, mergers and acquisitions)
  • Educate senior executives in making effective decisions
  • Construct forecasts and analytical models
  • Monitor and analyze industry trends and market changes
  • Understand and shape the company’s strategy and mission
image

System Implementations

NBF may be engaged to provide any of several implementation services including needs analysis, specking out system requirements, software and hardware selection, vendor negotiation, data entry, training, documentation, and project management. Experience counts for a lot on these assignments and our approach is designed to maximize the likelihood of success and avoid many of the common pitfalls. We are happy to serve as the team lead or in a support capacity.
  • Agile Discovery & Planning
  • Sprint planning
  • Needs analysis
  • Design & Configuration
  • System Development
  • Testing
  • Deployment
  • Ongoing Support
image

We will help you achieve your goals!

Let's talk