Quality of Earnings and CFO services for manufacturers and fabricators
A manufacturer's earnings live in its inventory and its job costs. We test standard costs, inventory reserves, maintenance capex, and working capital so buyers and lenders see what the shop really earns, and owners see what drives the price.
Talk about a deal Talk about the businessReply within one business day · Fixed fee in writing · No obligation
Buyers pay for clean costing and steady margins
- Lower middle market manufacturing deals show a median of about 4.8x EBITDA in DealStats data, against about 6.5x for private equity-backed deals tracked by GF Data, a gap driven by size, buyer type, and quality of earnings. Source
- In precision manufacturing and metal fabrication, median private equity multiples rose from 5.3x EBITDA for $10 million to $25 million businesses to 8.7x for $250 million to $500 million businesses. Source
- Utah manufacturing employed about 154,000 people at the end of 2025. Source
- Since October 1, 2026, SBA 7(a) acquisitions of $3 million or more need an independent Quality of Earnings, and lenders size the loan on its normalized earnings. The rule explained →
We work with lenders and buyers in Utah, Denver, Phoenix, Dallas-Fort Worth, Boise, Las Vegas, and nationwide.
Gross margin by product or jobInventory turnsScrap and reworkMachine utilizationOn-time deliveryCustomer concentration
Buyers increasingly price on EBITDA less maintenance capex, so deferred equipment spending comes straight off the value.
What buyers and lenders test in a manufacturer QoE
Inventory and costing
Standard costs tied to actual, overhead absorption tested, and obsolete or slow-moving stock reserved.
Job and product margins
Quoted margin against actual margin by job, customer, and product line.
Maintenance capex
Equipment age, deferred maintenance, and the capex needed to hold today's output.
Net working capital
A normalized peg built on monthly inventory, receivables, and payables, not a year-end snapshot.
Customer concentration
Revenue and margin by customer, contract terms, and pricing pass-through for steel and other inputs.
Labor and capacity
Overtime, shifts, and whether current revenue needs more people or machines to sustain.
Manufacturing & fabrication QoE: what's included
- Monthly inventory roll-forward
- Product and job margin analysis
- Maintenance capex and fixed asset review
- Net working capital peg
- Customer and supplier concentration review
Manufacturing & fabrication add-ons
| Inventory, standard cost, and reserve testing (manufacturer complexity) | $3,500 |
| Each additional legal entity | $2,500 |
| Physical count observation, per site | $1,500 |
Fees by deal size
| Purchase price / EV | QoE fee |
|---|---|
| Under $3M | $11,500 (sell-side $9,000) |
| $3M to $4M | $12,500 |
| $4M to $5M | $14,500 |
| $5M to $10M | $19,500 |
| $10M to $15M | from $26,500 |
| Lower middle market & PE add-ons | typically $25,000 to $70,000 |
Larger deals are quoted from revenue, entities, inventory, and report format. Pre-LOI earnings screen $1,950. All fees →
Before an LOI, run the seller's numbers through our free add-back sanity check. Terms like SDE, cash proof, and DSCR are explained in the QoE glossary.
Where manufacturers lose money
- Quotes built on standard costs that haven't been updated in years
- Inventory adjusted once a year at the physical count, so monthly margins are a guess
- Cash tied up in raw materials and work in process
- No margin view by customer, so unprofitable work keeps getting quoted
Priced for your industry
Accurate job and inventory costing is what lets a shop quote with confidence, borrow on its inventory, and defend its margins in a sale.
Start with a $2,500 finance diagnostic, credited to your first month. Interim CFO or controller coverage is also available, part time from $10,500/mo or full time.
Books & close
- Monthly bookkeeping and reconciliations
- Accrual close by business day 10
- Monthly financial package
- Quarterly review call
Controller
- Everything in Books & close
- KPI dashboard for your industry
- Payroll, AP, and sales tax oversight
- Quarterly 13-week cash forecast
- Monthly review call
CFO
- Everything in Controller
- Monthly inventory and cost reconciliation
- Job and product margin reporting
- 13-week cash forecast
- Borrowing base and bank reporting
- Monthly CFO meeting
Fixed monthly fees, month to month after three months. Day-to-day bookkeeping may be done by trained staff working to our checklists, always with CPA review and sign-off by Edwin van Stam. Talk about the right package →
Manufacturing & fabrication engagements Edwin has led
- CFO and controller of a custom metal fabrication company in West Valley City, Utah
- QoE on a stone fabrication and installation company, with updates through closing
Includes engagements Edwin performed with prior and affiliated firms. Client names are confidential.
Two finance leaders who have run manufacturing companies
Manufacturing QoE work is led and signed by Edwin. Monthly CFO work is led by Edwin or Brad, with Edwin reviewing every month.
Edwin van Stam, CPA, CEPA, CGMA
Served as CFO and controller of a custom metal fabrication company in West Valley City. Scopes every engagement and signs every QoE.
About Edwin →
Brad Berrett, Consulting CFO
Thirty-five years as a CFO and chief accounting officer, including manufacturing, sales and distribution, and international operations. Leads CFO work for manufacturers and distributors.
About Brad →Manufacturing & fabrication questions
Does an SBA loan for this kind of acquisition need a QoE?
Under SBA SOP 50 10 8.1, a 7(a) change-of-ownership loan with a business purchase price of $3 million or more needs a Quality of Earnings, and the lender sizes the loan on the QoE's normalized earnings. Below $3 million many lenders still ask for one. Check your deal →
How do you handle inventory in a manufacturer QoE?
We roll inventory forward month by month, test standard costs against actual, and review reserves for obsolete and slow-moving items. Year-end physical count adjustments often reveal that monthly margins were overstated.
What is a working capital peg and why does it matter?
Most purchase agreements require a normal level of working capital at closing. Manufacturers carry a lot of inventory and receivables, so a peg set on a seasonal high or low can move the price by hundreds of thousands of dollars.
Do you work with manufacturers that aren't selling?
Yes. A monthly close with real inventory and job costing, a 13-week cash forecast, and margin reporting by customer are the core of our CFO work for manufacturers.
Buying, selling, or running a manufacturing business?
Buying, financing, or selling? Start with a QoE conversation. Running the business? Start with a finance diagnostic.