A recast profit and loss statement incorporates necessary adjustments, including EBITDA addbacks, to present a more accurate representation of the company’s operational performance and earning potential.
This section highlights the most critical findings from our in-depth financial review, identifying trends, discrepancies, and anomalies that could impact valuation or business decisions. These insights offer a clear snapshot of the company’s financial health and operational performance.
We refine EBITDA by removing non-recurring, non-operating, or unusual expenses, providing a clearer view of the company’s true operating performance. This adjustment helps assess profitability and cash flow potential, ensuring more informed decision-making.
Seasonality & Profit Margin
This analysis examines revenue and profit fluctuations across different periods, helping to normalize financial performance. Understanding seasonality allows for more accurate forecasting and long-term profitability assessment.
We conduct a detailed review of the income statement at the monthly, quarterly, and annual levels to uncover trends, anomalies, and insights into cost structure and revenue streams. This deep dive enhances understanding of financial efficiency and sustainability.
Customer & Vendor Concentration
We assess the company's reliance on key customers or suppliers to identify potential risks. A high concentration in either area may indicate revenue or supply chain vulnerabilities that could impact financial stability.
Adjusted Net Working Capital (NWC)
We adjust for changes in working capital to reflect true operational needs. Analyzing net working capital provides insights into short-term financial health and the company’s ability to meet obligations.
By evaluating assets, liabilities, and equity, we gauge financial stability, liquidity, and risk exposure. This analysis helps uncover potential financial risks or opportunities for strengthening the company’s position.
Reviewing accounts receivable (AR) and accounts payable (AP) aging helps assess liquidity, cash flow efficiency, and potential collection or payment issues that could impact financial performance.
We verify cash flow accuracy by reconciling bank statements with reported cash movements. This ensures financial statements reflect actual cash activity, not just accounting entries.
Book-to-Tax Reconciliation
This process compares financial records with tax filings to identify discrepancies between reported earnings and taxable income. It ensures accuracy, compliance, and proper tax adjustments.
We verify payroll records against financial statements to ensure accuracy in labor costs and tax compliance. This helps identify discrepancies that could impact financial reporting and compliance.
