Piggy Bank or Performance Engine? Why Quality of Earnings Defines Valuation

03/10/2025 12 min Temporada 1 Episodio 3
Piggy Bank or Performance Engine? Why Quality of Earnings Defines Valuation

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Episode Synopsis

Is your business a piggy bank or a performance engine?In this episode of Buyers’ Frenzy, host Will Lindstrom sits down with Patrick McMillan, leader of the Transaction Advisory Practice at Amplio, to dig into why quality of earnings (QoE) determines whether your business earns a premium or leaves money on the table.Patrick explains how EBITDA multiples are shaped not just by revenue, but by the strength and credibility of your financials. From customer concentration and vendor contracts to employee agreements and balance sheet integrity, he shows how real value is created by de-risking operations long before you sell.Drawing on his CFO and advisory experience, Patrick shares how sloppy practices - like treating the company as a personal piggy bank - erode trust and suppress valuation, while clean books and proactive QoE reviews can add multiples to your exit.Highlights CoveredWhy EBITDA is the “level playing field” for valuation in small and mid-sized companiesHow quality of earnings reveals both risk and opportunity in a businessThe dangers of using your company as a personal expense accountReal-world examples of how clean books improved valuation (and reduced taxes)Why being “exit ready” is just good business, even if you’re not planning to sellHow a proactive QoE report can strengthen operations today and maximize multiples tomorrow. Whether you’re actively preparing for an exit or simply want to run a stronger company, this conversation shows why quality of earnings is the linchpin of valuation success.Have insights on “Deal Killers”? If you’re a CEPA, CPWA, CFP, or fiduciary with experience navigating the hidden risks that derail deals, we’d love to hear from you. Connect with us on LinkedIn or at theculturethinktank.com/contact