Quality of earnings, adjusted EBITDA, how to analyse revenue in a due diligence process

Question

Accepted Answer

Analyzing quality of earnings and revenue in due diligence process involves assessing adjusted EBITDA and other financial metrics.

Quality of earnings analysis involves assessing the sustainability and reliability of a company's earnings.
Adjusted EBITDA is a key metric used to evaluate a company's financial performance, as it provides a clearer picture of its operating profitability.
Revenue analysis involves examining the sources of revenue, the company's pricing strategy, and its customer base.
Other financial metrics that may be analyzed include gross margin, net income, and cash flow.
It is important to review financial statements, conduct interviews with management, and perform industry and market research to gain a comprehensive understanding of a company's financial health.

Top EY Global Delivery Services ( EY GDS) Senior Analyst interview questions & answers