RIA Valuation Insights Whitepaper Release: Assessing Earnings Quality in the Investment Management Industry
For this week’s post we’re introducing our whitepaper on quality of earnings (QofE) analysis in the investment management industry.
A thorough QofE analysis plays an important role in evaluating the performance of RIAs. It transcends traditional financial assessments, providing a view of a company’s sustainable earning power by adjusting for nonrecurring items and discretionary expenses and analyzing revenue and cost structures.
For RIA buyers and sellers, commissioning a QofE report is an essential element of the due diligence process. In essence, a well-executed QofE analysis not only reveals why a firm is profitable but also assesses the likelihood of maintaining and enhancing that profitability after the transaction. This comprehensive approach ensures that both buyers and sellers make well-informed, strategic decisions in the RIA industry.
