QoE on LMM Companies
I am currently in what feels like a tough spot, working with a small company (EV < $40mm)that has several subsidiaries and our team opt'ed to not get a QoE preformed. No one at the company was/ever has been an auditor. This company does not prepare budgets or get monthly/quarterly audited financials. I am now being asked to combine the internal monthlies and as I go through them, Revenue doesn't tie to the annual audits, expenses don't tie to the audits, they have a ton of equity investments across the board that pay irregular dividends. It is hard for me to comfortable say what the financial outlook of the company is to my seniors and I feel like this would be solved by having a QoE preformed. Is this normal in the LMM?
For those that work in the LMM, How often do you get QoEs for your sell side engagements?
At that size I would expect a QoE
And I would also expect relatively messy financials.
BTW, nobody is doing regular audits unless their lender requires it at that size...lol, especially monthly or quarterly. Would cost way too much relative to revenue.
Yeah it has been a mess trying to put these together, but after burning another weekend we got there. I am genuinely, I feel like I missed several add backs when I was putting this together. How would one know what the correct add-backs are in a transaction?
Messy financials are not uncommon in the LMM. In my experience, when I encountered a discrepancy and thought there was some accounting error or something didn't tie I would usually just keep digging and eventually everything would make sense.
Dumb question but, have you checked the adjusting journal entries?
Yeah had to go back through 3 years of AJEs to get everything to tie.
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