A report typically prepared by a CPA firm during due diligence. This report (either paid for by the buyer or seller) provides a detailed analysis of all the components of a company’s revenue and expenses including customer revenue, working capital, EBITDA adjustments or normalizations.
While not an audit or a review, it focuses on what a buyer would want to know when acquiring the company. It also assesses the sustainability and accuracy of historical earnings as well as the achievability of future projections. Many times, this report is at the request of the board of directors or a private equity firm funding an acquisition for a strategic buyer in their portfolio.