Diving into Diligence

2020-06-30T13:57:49-04:00

“Financial Due Diligence” (FDD) and “Quality of Earnings” (QoE) are often bandied around during a transaction —sometimes used interchangeably— but what’s the difference? In this post, I explore the key differences between typical FDD and QoE, including when each term applies and what they tell us.  Being Diligent  FDD and QoE are both exercises in diligence, but they serve different purposes – and sometimes at the same time.  On the buy- and sell-side of a transaction, owner-operators, lenders, investors, and, at times, regulators will request that FDD or QoE is performed so that relevant stakeholders can gain assurance and mitigate their risk.  From an owner’s perspective, [...]