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    11 views49 pages

    Ampl o Sample Company QofE Report PDF 1710247754

    Uploaded by

    Rashid Arif Redoy

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 49
    aa te) Sample Quality of Earnings Report: A Comprehensive Analysis of Financial Performance Se oe ea eee ee ene pee Dee ee Load eee ey eats Eaten aerate acer eer Sooo eee ee eee eee ee ee mr ea ey Seu ner Ee eine een heed eran aac ee es Although the financial information throughout this reportis a completely FAKE (made up] company and the data fs not real, nor was it derived from a real company, the example report provides a valuable resource for anyone seeking to understand how a quay of earnings reportis structured and Reo cae ate CO nee ee Maret Cra Leg renntNer Yee n ele Cetert Re elo aa te) Thinking of buying or selling a business and need a Quality of Earnings Report? Reach out to Ampléo today. QofE@ampleo.com | https://ampleo.com/contact “ Ampléo DISCLOSURE The financial informational throughout this report eee Merde) h4 FAKE (made up) company. The data contained is not real, nor was it derived from a real company,] #a Ampléo Fake Company, LLC Financial Due Diligence Report February 14, 2023 #. Ampléo Febru 1, 2023 Indviduats Name Indus Tite ase Up ctont Some Cy, UT 84000 Inaccordance wth our engagement eter dted January 5, 2023 (Engagement Lote" pease id tached Amplee's Ample” “ou, wa", and us) Hrancal due ligne roport Report reflacing tne consting procedures we peters in reéaton fo the operational results an hen postion of Fake Company. LLC Fake” othe “Compe ‘ats potertal sequstion om Mage Up Chet (lent {he arts nutes, en roses tt we pred oui Apert Rep, me bse on recon reco epson mae Wy Fes Ionagertent Wile there are node equerents ee proceaures at Conse stands for due digence. our werk wis conducted In accordance wi he ec Instute of CerthedPubte Accountants’ ACPA) Statement of Sanda fo Consuling Series Not By accptanc of Bis Report you ckrewedge Bat the sicieney of ‘he procedures pereredis solely te responsby of len. emake no representation o warrates regarding the Report or relate Sendces requested, Incuing other mates thst may have come o our stein faa we performed ‘catonal procedures, and we have no obignon fo updo our report for evens occuring subsequent ete Gate of 0 rpert oF ot cslosed to us by axe, The Sences We ‘tore engage to ptorm so not conte an aud in accordance mit gonerlyaecaptes accounting princeses nthe Unites tse, aga or nestor adic, a framinaton of any ype an estimate of value, an seceurng ort opinion, rary oer atesation of eve series accordance wi) te AICPA of ihe feustry Body ‘suck we express ne opiion or any char form of asurence tereer. Our work canot be eledupon te close er. aus, or Mega acts at may exis ‘Tis Reports slay othe ntormation an use of Ciera. No pation af ths Repr. in whale on pat. shal be accessed by, efeecto,dstibued t,o reed upon by any Cer party witout Angle's prior wien conser. Such requests moy feque so Pefermadlanal Prcedtres \We appreciate he opportunity to work wth you (lena) Parmer [EO Solions, LC. cba Ampleo #. Ampléo IMPORTANT NOTE FOR ANY INDIVIDUAL OR ENTITY NOT AUTHORIZED TO HAVE ACCESS TO THIS REPORT ‘Any ncivgualor ently who's not an adctessee ofthis Report or who has not executed a separate release letter with AmpIGoIs not authorized to view or nave fecees tots Report Shall any indhvual or entity who) isnot an adéressee ofthis Report or (2) has not executed a separate release letter with Ampleo, view or access this Report ‘sch inaviduatorenty agrees tothe following terms witout modifeation o reserva +The ncvidalorentiy viewing or accessing this Report understands the work performed by Ameo was performedin accordance with the intuetions and tmited scope set out by our addressee Client and was performedfer the sole benef of such Client, and nto the use or bent of anyother party. The incivcualor entity viewing or accessing this Report acknowledges the procedures petformedmay nt include al procedures deemed necessary for purpasescl the reader. ‘The incividualor entity viewing or accessing this Report agrees that Ample. is partners. employees, and agents neither we nor accept any duty of respansbiltyto te Report, whether in contract orn tor (including without limitation negligence an breach of stttory dy. and shal not be Tabi in respect of any los, damage of expense whatsoever in naire which caused by any Use te reader may chaose to make ofthis Repo of hich s eterwise consequent relied upon, upon gaining acess to the Reportby the reader. Further the indicualor ently agrees hat his Reports not tobe referred to or quoted, in whole on parm any prospectus, reqlstraton statement, offering circular, publi flag an, or any ‘otver agreement or document andi) nt to cstibut te Report without Ampleo's pris consent. a Ampléo Table of Contents Background, Overviewsand Key Findings 8 Quality of Eartiings (EBITDA) 12 Financial Statements 16 Financial Performance 22 Working Capital 32 Appendix A: Scope of Procedures 37 Appendix B: Supporting Schedules 4 aa te) Background, Overview, and Key Findings oon eM ean Background, Overview, and Key Findings EBITDA, as tines Digenes Acted EBITDA Adjusted EBITDA Magn ‘SCOPE OF PROCEDURES PERFORMED ‘ho varous proceres deta in Append A, agreed upon wih Mado Up Cet wore prem! on the franc information Hom Jarry ,2020 Brough January 3, 2023, ogy meegenet of Conga, Ot mera 6 sy ome the reso pang ocnenon a es OAs MOAT ese a ‘COMPANY BACKGROUND, SYSTEMS, AND ACCOUNTING DEPARTMENT. Fake Compar, LLC Fake’ cr "Company sn €Commerce company tat species in sling wigs to consumers. ‘he Company was estabtsed in Jruary 201 base oto Somewhere, UT, and i regered 36 3 Deana LAC ‘he aecountg depanment neues ehn De (CFO an lane Sith (Conte Here where we wuld ype up tomato egg heres he accountng ean les, re he losout process ‘he Company tz QuickBooks Onn ors accouring system, tbo fr slower system, ed the es his psagach conn infomation regarchg the ystems tat lect ‘the accountng ae nana reports. Background, Overview, and Key Findings EBITDA, as tines Digenes Acted EBITDA Adjusted EBITDA Magn KEY FINDINGS Company sos roduc tough ts webs and ther varos eCommerce webs ‘Dug he TT pero. he fotowng key matres Were ered: ‘Gross magin was 527. sng ar averting Spend was 13.4% of revenue Revere has oun Hor $4897 FZ to $58.24 1 FYZ2 of 7% gronth Revenue grew om $49.94M n TMA Jan 22 to $59.70M h TM J0623, 61.75 growth ‘he Companys igenceadste EBITOA Adused EBTOA) mated postive hvoushou the dligence pads Ajsied EBITDA increases fom $356M in FY20 to $5.75M i FY24 {0'S850M Inte TTM an Z3 pend. These tures represent 3. 1% a 10% of even, especie, Background, Overview, and Key Findings EBITDA, as tines Digenes Acted EBITDA Adjusted EBITDA Magn OTHER ITEMS Relerences to "Management veuptou ths pot consis of John Doe an ane Sah, ‘Management rpreens ha ropa cent, porn ton exists. ‘We oosered that he Company ys 5s txin varus rectors. Homer, We dot de adional ras du to taxcigence-speicaly News ep as rot ed nthe “ough he Repo ct no subsnquent evs wee nod by menagerie that wou que an acral rou on he Balance shee of cee ae Quality of Earnings oon eM ean = Ampléo nome 5 sess s area § somes sea + te ae + Orit 202 leo 20 aoe 7 iasae § a7ama § aoaan § Samra a0 ans 1+ 0 penal op am e990 “+ Soran mse eae imo ear (6 3) Peon rae ser sao acon “Teitaenet Ait Fess 6 om 6 wom sass “Weroper Aste TOA Senne § ere 6 9 enced ESTA 6) eeu Foe om ame con 1) Taman Comet Sasa oon + 9) feeewer Serer 00 ew 00 fete fre — acon eno 1) owe cangrn GRO om) reo rs) eeotgce asters Sos ¢ 100 + areas _asom Diener Ade ETD ‘S ausrnie § Avie 6 qomeas § os ‘Ase ESTO Rape a Quality of Earnings: Adjusted EBITDA ‘mone ended Docombor 3, 2020 (FY20% December 3,202 PFY2", Dacamba 3 5002 P22, a many 32029 617 D2 EBITDA & Adjusted EBITDA ‘he Companys aigenceachies E8iTDAIncrenend a flows $.56M m FY20, $5,756 InFYZ1 So.8m In FY22_ and $69M curng te TTM Jan Zs pera. Adested iTOA ‘sig th TIM J0073 pio Hees ore we wuld edd same veige egaing what the pinay crs were fr fest urunios Management Adjusted EBITDA, 8) Donatons. Manogereat epesens ha donntons wire made f el ehanties chosen bythe execution and that th practice ‘al rare postanacion 19 Personal Accountant. The Companys accountant was utes o proces ts othe ‘Susman na ben erired. We gained comfonsuourdg ths ase Oy eng & «Owner Compensation. This adstrent oats back the compensation that Owner ‘teen. Somer ana fer hve agenda sy of $3004 tr wnen agence ‘Susiment na bean made tr tothe ston Bel, 1 Personal Travel The Corpuy pi fr personal va! excenses. To gt comloale ‘thew anor, we owed a phased slocton ofthe corling operas a Ampléo i s srieam + somaealS sca uae msn gan zoe oe aoe 7 ram cams § Gas are mame ans? 2m ammo e000 ou § wom sas 5 Grea Gases § Gomme oo mee uw fa oan) (cio 7 ona 7 Quality of Earnings: Adjusted EBITDA Diligence-Adjusted EBITDA Reenter Fees. The Company pid ah pry oe wo kay employees deg ne pore utr auc, ata are ronecae, eran ave ee ade {Transaction Expenes.n Apt 2021 he Compan ncue coats ete o 2 potent | ttreacon anche not completed Sarng in October 2022, the Company Baoan ferns Us opto ag. a ese cok af fl to ths potent wansocton a we honsecaing nature, ahstents have Seen ade lo eave tem tom ESITOR. 6) Releatin Expenses Tho Compan ncwres eas to leet to anew eenoise ‘ng 902020, a hon apn 032022, Texe ao cori roncocing fa ‘nd taretre susan have been made. To valde tose seamen we vswed ‘tes ro apy noveg cones otanng oh o tne moved a Wan Lat. Lt utr ne pn bg nae 3020 an boentn place twougrout te digeree pened ‘Owner Compensation. This scusmert forthe agreed upon compensation af $200k Between Owner end Suet ond nudes 925% py ulden. Rett te Secon above ‘egarang an adhe ade tor te compananion iat was heed of Earnings: Defined vs. Adjusted EBITDA. EBITDA TTM Jan-23-D Defined vs. ‘Adjusted EBITDA GAAP btigance hustmentttaing 090m mace to Reported EBITDA to re at Auster 8n23 pero if fy Fake Company, LC-PRANCAL DUE Financial Statements oon eM ean a Ampliéo Financial Statements: Income Statement - Adjusted Income Statement Summary ease reterDeow es fhe eone salement. Amp eyed ny scant Oa series sn custorsrutedo ne pesos under eno apc eases some See ere tor scot or rps aes ZZ sersoemen represen tat revere is ecopnzes ena act ass, ase on ate of FFF stoners caste ewenss we ecogneed ven need on an ca bs end Se) coc5wereceraasto match ne revenue ecognze, Net ncome need tom $2504 F120 to $570 in F210 $540M trough he TIM es as BE BF reves. toe peerage of sain not coe neared Kom 3m FY20 ts FYE = as aa rs thendncreand eB trougn he TM peo The Secoee nag we pinay = = = eae Swen neresesnFunen COUS os wel os mStar, Woes & Beets Pease es aso feer beam or tuber nays =e ae Baa “he Campany hes ay yet poly a aeons webte, Manageent Ea oe ae represents tht an sowance for ls retunsisebiched 2 of re reves 60 dae are [ae . - ‘The Compury fers wget to consumers Yvough he Companys wetale noe See se em — ~~ > ‘Conmoce websites Sues gew tor S3840M i PY20 (0 848A FZ or 7S a Se tt Som Sacs se tom $498 TIM an 22 o $99 79M in TM Jona 11.7% Sos ae eee reece Sroum, Saat owen nsbeonsuonea va agetee mart carpus “= Ampléo Financial Statements: Income Statement - Adjusted Income Statement Summary (continued) Be meee) The Compory autres FO for ientary costing andincides andes cost Product COGS Me Bl os >> | ee 'seakolt ug te folowing Formal: bing roy va» purchases ocing Inver vl Togs omtoite wth hase ecto ww obtained 9 haphazard ‘pl. mece om pos encore An ound em oben compance th US ‘espucvey of theta cots of good ol ding th TM pod. Compared la ‘Sls these represen 288% 146%, and 398 of he TT pete In an acl GoTo an ‘tol company. hs preranh wit contain more dente ans suraung these toms ‘eandng toraton around weno obslescncenesenes Bank 8 eComm Fees Bark areeComm Fees comps of costs ced for bankng andere cara ansactons ‘men compare tote amount foal se, these epeset 2 he algence pea During te peas under ants these remaied between TBs and 25% ote la ‘Compuer &1 ion represented as percentage of aes, ese cose represent 08% 0 10% Dury the enods under anal, these fepesent between 94 and 2% ofthe la expenses ‘We wed eds anguage here rghring th ans of nese costs eed cig the [GAAP weatmentoinsrence roms Financial Statements: Income Statement - Adjusted = Ampléo marie snex RESEEEE Income Statement Summary (continued) Maketing & averting Hurkaing a sdverisiy expenses we he secons gest caugary of expenses. These ‘ats ores’ 351% fetal expres cui F¥20, 3.8% ding PY and 32 9 and 520s oftototaeapanees Suing the FV23 and TM Jon.23 paras especvey. a9 Derentage of salen, represents 1:2, 10% Oh and a cng the P20, FY Fraa and TIM prods, repecive, hese expense mary cone fees pat ‘eras atare maragerers evens, Uodeshows autee's publ labs, ‘teratmnigener wth uo Sy ho Msn 8 oT ‘nc your groom inthe xtegory a iron the ss out DLN FY22 te Company made more sate core regain fxg averting fat oad 1 ete rons ‘Tas where you woud see verbiage suroundng whl is calegony compres ong wah sone ana Profesional & Seve Fees Protea ane sea foes comprise primal of eg! and accounting foo Ar 3 Derenageof tal snes, prfessoal and sce foes represen between 7s and ON (ting te vied unde review Here, you Would Se some spec enmses ond ans Sones, Wages & Benefits Soren Wagos & Bones re th rest atgor of exposes: Bocas oft ns Secton woul conta more depth nase ar onguage repadng wit NCOnErSeS, 2 treo the Fuctstons = Ampléo Financial Statements: Balance Sheet - Adjusted al {8 Balance Sheet Summary eae eer bono ans ol he balnce sheet. Amp ane any sia alaees and ucutors volte tothe pelos vader ones ple ase me talance she counts or purpones of ona Refer obo Socal ‘Accounts Recehabie sen eas scenes ont pet rosea hh ray os Inventory The Company contacts waa thc ary to mance th products. Ivetery comprises ums tha af watereused st Ame Company 23PLn Somewhere, AZ. Acme {mpary patos pryscal ours on 2 mri bass, wich ate then concede he GL Prepaid Expenses Prepad Expenses comoies of eposts made fr goods and services tobe rece, sch Srinmrance pole and ppd ne fates A doled shea of thoes uae bared irom Managemen ond toy appes to be recorded and eased according to US GAAP vo no a pterman ao vel Acted aso ate ‘Accounts Payable ‘a Rb agng tawny wor obanes Kom Quckdooks ctalng ws compris the talanee dura the pelts under aah The was aged the Gu. Aso Janu 3h 2023, 934 of te total amour ue was Between ent and 30 dys pos Que, “= Ampléo Financial Statements: Balance Sheet - Adjusted CN II tance Sheet Summary (continued) ate “im “iam ‘aes “cg Gu me me Aecrued Expenses = ce a ee a im) scsuss cxpercs rcs excores a wr ecogize whe need typi ce ttoapeert rset tat esters ord olen according (US Sua However Apis ol ot peor an su overly th Adele anaes ad uc ofthe ecu wipansesie recommends to erty ay potenti espe, Werebsered that the Company pays sles xn vais jutions However, we dat 2p adetonl anja fo tax agence-specicaly Nests foot ns Mtn Ihe Seope. deta aust tecormended ently any posabie dewatore om GAAP, wala ny potent expec ‘The Company hase $200M ie f cred wan XYZ Bank, wc size omance Invenio puchases, Menagemest hes made sae decors to uses eo ce 12 ‘uring Ne heaves! pete anser ana The mania amount eam dng the Tito wos $1S0M the non of Fob Aa an, hs nea adda balance 101 $025, peo reve he bak satan to very hess ances. Long erm Debt Tsconpack an SOA len. Ane cl fom etn aes sound Financial Performance oon eM ean a Ampléo _Enanll Peron Revenue Summary & Sales by Channel Revenue Summary & Sales by Channel “Te nats on ne foloning sides sow te concetaon sles by channel Pee eer baw or ana. “The Conny els wigs to consomers tough te Company's wate an anor eCommerce patos. ‘cash to revenue poo! was performed valdate the sales amount recorded nthe nce sfateent. Cash depos fom he bank statements were raced to ancurs recedes inthe GL. {o ensure th exten ond accurory fever recorded F¥20, FY2L ahd F122 5 wel asthe YTO 2073 perio eu January The caf eve bc was bit agree CN ‘Seosis he amount feared ne neon Sateen wi rater free [te T piod Pease ele to Neca To evenue poo seco er tet deta anageent represents it rvense is recognizes when sipped appears th the Company i recogtizing even nt camplance with GAAP, however. Amparo pero a act ‘IASC 5G conplane, A elie aust recommended to ets any passe devon fom GAAP ‘The Company ceased net sas om $38 40M in F20 to $4897M FY, are hen apa o $58 12M FY22. This equates 027.9% and 87% row respecte Saks ew om 543.9 TM an 2219 $58.79M nTTM 23, 0119.78 Fo Due tobe nature ef te Companys business. ba dis are mina Aso Jan23, he ltl AR amount represen aproninally 43% othe previous mon’ Sls So the dae fs ‘eport the Company hes iat rpumened en atowance ter bd Sk. oer tothe nee Statement and Blnce Sheet Sunmary sects fr deta surrounding the Dcounts,Retuns and Alowances Fe Company LC-FRANCAL DUE DLIGENCE Ren a Ampliéo Finanial Performance: Revenue Summary & Sales by Channel Say Ss sara Cia pats Gers aise carave suis) om om ox oe bcm me oma ee io — i i oe o ee ConaTi suonsH coiana comma [onlievlenied [lial ‘Sales by Channel TTMJan-23 $250'330 = Ampléo Financial Performance: Sales by Product, Sales by Product ‘recht eon non non is sh De es cla We Campa tp KU esd one TTM pi We tne et et SK vel es dt tom Maagerat ‘paid a a a a foe sit rg gg Ampléo Financial Performance: Sales by Product Sales by Product (continued) a Ampléo Financial Performance: Margins by Month Margins by Month ‘The cha below anon e flowing ides show the Sls eo he Company's gross and net mags by mon fhe TTM pet coos pees Peas ee ee) ones cmt tan oom ot Sant tam aa i aa chee nme asta nae a ee Ceowe he am gre ai som sors arm tae | Qa Sooty ieee cas cela came eam

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