How Quality of Earnings Reports Can Save (Or Kill) Your Deal

In this episode of the Power Exit Podcast, John Marsh sits down with Caleb Lloyd to explore how Quality of Earnings reports can determine whether deals close successfully or fall apart entirely. Caleb reveals a shocking case study where improper accounting adjustments caused a 40% EBITDA drop that killed the transaction, and explains why reviewed financial statements alone won't protect sellers from due diligence disasters. Listeners learn why most small business owners maintain "accrual-esque" books that serve operations but not transaction readiness, how revenue recognition issues blindside prepared sellers, and why the principle of "be consistently wrong" matters more than perfection. Caleb shares practical strategies including rolling three-month P&L presentations to smooth margin inconsistencies, the "cash proof" process for third-party credibility, and leveraging CRM data to demonstrate business transformation. He also reveals why sellers regularly leave millions on the table by missing favorable adjustments, when $40-70k QoE investment prevents million-dollar disasters, and how one company kept their QoE fresh for two years while doubling business value.