Quality of Earnings Explained: What Kills Deals & How to Prepare w/ Mary Grace Doggett | This Is M&A

Most founders think their financials are bulletproof. When quality of earnings review begins, quality of earnings review begins. In this episode of This Is M&A, Mary Grace Doggett, Transaction Advisory Services Manager at GHJ, breaks down what a QoE actually tells you, what it does not, how smart sellers use it to protect valuation, and the red flags that quietly reprice or kill deals before close. Mary Grace provides financial due diligence support for buy- and sell-side transactions ranging from $10 million to $1 billion at GHJ, a national independent advisory, tax, and accounting firm. She specializes in the food and beverage sector and works with privately held businesses, private equity firms, and institutional investors across the lower to middle market. In this episode, you will learn: ✅  Why a QoE is not an audit and what that distinction actually means for valuation ✅  How smart sellers diligence themselves first and why transparency upfront is almost always cheaper than negotiating under pressure ✅  The red flags that kill or reprice deals: revenue quality issues, unsupported add-backs, working capital surprises, and lack of financial infrastructure ✅  Why deals don't break but unravel, and what causes the fastest unraveling ✅  When to run a sell-side QoE and why 3 to 6 months before going to market is the right window Learn more about Mary Grace Doggett and GHJ:  Website: https://ghjadvisors.com  LinkedIn: https://linkedin.com/in/marygracedoggett/  Email: mdoggett@ghjadvisors.com Connect with your host, Steven Monterroso:  LinkedIn: https://linkedin.com/in/determined2succeed/ Follow This Is M&A Podcast on LinkedIn: https://linkedin.com/company/this-is-m-a/ Want to become our next guest?  Sign up or subscribe:  https://sharevault.com/this-is-ma/ Listen now on Apple Podcasts, iHeartRadio and Spotify. Chapter markers: 00:00 — What Quality of Earnings Actually Tells You  03:25 — EBITDA Normalization Explained  08:36 — QoE vs. Audit: What Is the Difference  10:01 — When Does a Deal Need a QoE  12:23 — Revenue Quality Red Flags That Kill Deals  15:15 — EBITDA Add-Back Battles  17:04 — How Deals Unravel  18:22 — How Smart Sellers Prepare and Protect Valuation  21:54 — Working Capital Surprises  24:41 — Related Party Transactions  25:58 — The Red Flags That Kill vs. Reprice  28:05 — Timing: When to Run a Sell-Side QoE  31:22 — Mary Grace's M&A Family Legacy #thisismapodcast #mna #qualityofearnings #financialduediligence #exitplanning #privateequity #foodandbeverage #lowermiddlemarket #ebitda #mergers #qoe