---
name: P&L & EBITDA Review
description: Review a profit-and-loss statement and build a defensible EBITDA bridge with the assurance-first rigor PwC is known for — reconcile the numbers, normalise one-offs honestly, separate GAAP from adjusted, and flag what a real audit would question. For founders and operators preparing financials for a board, a raise, or their own clarity.
audience: founder · CFO · finance lead · operator
---

# P&L & EBITDA Review

## What this is

A method for reading a P&L and building an EBITDA figure that survives scrutiny, in the assurance-first tradition: reconcile before you interpret, tie every line to its source, normalise one-off and non-operating items with a stated rationale, and keep a bright line between GAAP/IFRS reported numbers and any adjusted (non-GAAP) figure. It produces an EBITDA bridge that shows exactly how you got from net income to the adjusted number, and a list of the items a rigorous reviewer would push back on — so the founder walks into the board or the diligence room already knowing the hard questions.

## What this is NOT

Not affiliated with or endorsed by PwC or any audit firm — it uses the publicly understood assurance discipline (reconciliation, materiality, GAAP-vs-adjusted separation) as a reference lens, not their methodology or brand. Not an audit, not an attestation, and not a substitute for a CPA — unaudited analysis is exactly that, and it says so. Not a licence for aggressive add-backs: every EBITDA adjustment is defensible and labelled, because the fastest way to lose a diligence process is an add-back a buyer won't accept. Not tax or investment advice.

## Method

1. **Reconcile first.** Tie the P&L to the source of truth (accounting system, bank, subledgers) before interpreting anything — analysis on unreconciled numbers is fiction with decimals.
2. **Read the structure.** Revenue quality (recognised correctly, recurring vs one-off), gross margin, operating expense categories, and the path to operating income — understand the shape before the ratios.
3. **Separate GAAP from adjusted.** Keep reported GAAP/IFRS numbers distinct from any adjusted figure; never let an adjusted number masquerade as reported (the discipline behind SEC Reg G).
4. **Build the EBITDA bridge.** Net income → add back interest, taxes, depreciation, amortization → then any normalisation, each item shown, sourced, and justified. The bridge is the deliverable, not just the endpoint.
5. **Normalise honestly.** Strip genuine one-offs and non-operating items; resist dressing recurring costs as one-time. Flag every adjustment a skeptical buyer would challenge, and say why you'd defend it.
6. **Check materiality and consistency.** Focus scrutiny where the dollars are; confirm the numbers are consistent period-over-period and that a definition didn't quietly change to flatter a trend.
7. **Flag the audit questions.** List what a real reviewer would test — revenue cut-off, related-party items, capitalised vs expensed, unusual accruals — so there are no surprises.
8. **State confidence and limits.** Say what's measured, what's estimated, and what an actual audit would be needed to confirm — the value is an honest picture, not a flattering one.

## Quality bar

The P&L is reconciled to source before interpretation · revenue quality and cost structure are understood before ratios · GAAP/IFRS and adjusted figures are kept strictly separate · the EBITDA bridge shows every add-back and normalisation, sourced and justified · adjustments are conservative and each contentious one is flagged · materiality and period-over-period consistency are checked · likely audit questions are listed · measured vs estimated and the need for a real audit are stated.

## Guardrails & escalation

An analytical review in the assurance tradition — not affiliated with PwC or any firm, and explicitly not an audit, attestation, or CPA sign-off. Unaudited means unaudited, and the method says so. EBITDA adjustments are conservative and defensible; aggressive add-backs are flagged, not smuggled. This is not tax, audit, or investment advice — a raise, a sale, a tax position, or a filing routes to a licensed CPA and counsel. Every figure is labelled measured or estimated.

## References

- Catalogue: https://edwson.com/consumer-design-system.html · Contracts: https://edwson.com/cds/components.json · Agent brief: https://edwson.com/cds/AGENTS.md
- Related within this kit: the revenue-forecast, spend-analysis, and enterprise-health-score skills. GAAP treatment, audit, and filings route to a licensed CPA and counsel.