Keystone Business Consultants, LLC provides the following services for investors including private equity groups and private equity groups:

• Earnings Quality Assessment (“EQA”)/Investment Analysis
• Merger and Acquisition (“M&A”) Due Diligence

i.   Earnings Quality Assessment (“EQA”)/Investment Analysis for Investors:

Earnings quality is an important aspect of evaluating an entity’s financial health, yet investors, creditors, and other financial statements users often overlook it. Earnings quality refers to the ability of reported earnings to reflect the company’s true earnings, as well as the usefulness of reported earnings to predict future earnings. Earnings quality also refers to the stability, persistence, and lack of variability in reported earnings. The evaluation of earnings is often difficult, because companies highlight a variety of earnings figures: revenues, operating earnings, net income, and Proforma earnings. In addition companies often calculate these figures differently.Keystone’s definition of earnings quality draws from Pratt’s and Penman’s definitions. We define earnings quality as the ability of reported earnings to reflect the company’s true earnings and to help predict future earnings. Our EQA model assesses the stability, or lack thereof, of a company which leads to a more complete understanding of its future earnings potential.Keystones EQA report consists of a model that uses 20 criteria that impact earning quality applied as a rolling evaluation of all periods presented in the financial statements (refer to table below).

 Given the widespread confusion about Proforma earnings and recent accounting scandals financial statement users need an independent measure of the earnings quality. Since Keystone is considered an independent evaluator of earnings quality, they would provide financial statement users an independent measure of the earnings quality.Keystone Business Consultants, LLC provides earnings quality review services to financial institutions and equity investments.

ii.    Merger and Acquisition Due Diligence (“M&A”):

Keystone provides M&A due diligence services to equity sponsors during the purchase or sale of a portfolio company. Keystone specialists help our clients maximize value and minimize risk during the purchase / sale process through evaluating the risk and return considerations of the transaction.Engagements are customized to our client’s needs and deal parameters and typically include:

• Evaluating the business model
• Analyzing earnings quality, balance sheet, reserves and unrecorded liabilities
• Testing the integrity of historical and forecasted financial information
• Assessing working capital and capital expenditure requirements
• Reviewing internal control environment and Sarbanes-Oxley compliance