During a Quality of Earnings review, the buy-side analysts are questioning our normalized EBITDA adjustments for our redundant administrative roles. How do we use our EOS® Accountability Chart and GWC™ assessments to prove these positions are truly redundant and justify the add-backs?

Question

Tyler Smith · Accepted Answer

Buy-side analysts are naturally skeptical of EBITDA add-backs related to labor expenses. They will argue that if you eliminate a role, you will have to hire someone else to do the work, meaning the savings are not real. To defend these adjustments, you need an objective way to prove that the work is either completely automated or successfully absorbed by your remaining team.

Your EOS® Accountability Chart is the perfect tool for this. Show the analysts your past and present Accountability Charts. Highlight the redundant seats and use the GWC™ assessment to demonstrate how the functions within those roles have been reassigned.

If you have automated a manual reporting process, show how those specific measurables and accountabilities have been integrated into your system, eliminating the need for that seat entirely. By mapping your workflows directly to the Accountability Chart, you prove that your organizational design has evolved and that the eliminated roles are truly redundant. This objective documentation makes it incredibly difficult for the auditor to dismiss your adjustments, ensuring those cost savings are successfully added back to your historical EBITDA to maximize your valuation.