# Write a quality-of-earnings due diligence request list for an acquisition

A prioritized document and data request list for buy-side financial diligence, focused on quality of earnings.

- Topic: Finance & Accounting
- Framework: Few-Shot
- Level: Standard
- Tags: Finance, Write, Plan, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/write-a-quality-of-earnings-due-diligence-request-list-for-an

## Prompt

```text
Help me prepare the financial due diligence request list for an acquisition we are evaluating.

**Target:** [industry, size, business model, ownership]
**Deal rationale:** [why we are buying]
**Valuation basis:** [e.g. "multiple of adjusted EBITDA", "ARR multiple"]
**Known concerns:** [e.g. customer concentration, recent margin jump, founder-dependent sales]
**Timeline and diligence team:** [DETAILS]

Cover:
1. Quality of earnings: monthly P&L for 3 years, management adjustments with support, one-off items, owner-related costs, revenue recognition policies.
2. Revenue: customer-level revenue, contracts, churn, backlog, pricing changes, concentration.
3. Net working capital: monthly balances, seasonality, aging, inventory reserves, to set a working capital peg.
4. Net debt and debt-like items: leases, deferred revenue, unpaid bonuses, earn-outs, tax exposures.
5. Costs: headcount census, compensation, key vendors, capex history.
6. Tax, systems, and controls at a high level.

Return:
- A request list table: # | Area | Request | Why it matters | Priority (must / should / nice) | Requested date.
- The 10 questions for management interviews.
- Red flags to watch for in the answers.
- A list of items to hand to legal, tax, and commercial diligence.

This is a working checklist; engage qualified diligence advisors for material transactions.
```

## What to fill in

- industry, size, business model, ownership
- why we are buying
- e.g. "multiple of adjusted EBITDA", "ARR multiple"
- DETAILS

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