A company found $100K of EBITDA in its last twelve months, and it didn't sell one more thing. Sharing this because it's the kind of issue that's easy to miss before an LOI. The deal. A searcher brought us a niche business that sells to schools: about $1M of EBITDA, sticky customers, and a deal that looked ready to sign. What we noticed while scoping. For years, the company never carried inventory. Every purchase hit cost of goods sold the day it was bought. Shortly before the sale, it started recording inventory, and the entire opening balance landed in this year's COGS. Years of purchases were suddenly treated as an asset. Margins jumped. Nothing about the business had changed. Why it mattered. That was ~$100K of EBITDA that would never repeat, about 10% of the number our client was about to pay a multiple on. At 5x, that's a $500K mistake, on a personal guarantee. The CIM never mentioned the policy change. It showed up as a margin jump that looked like good management. Could an AI tool have caught it? Maybe not. We use AI to move faster too, but AI is the scan. On a deal this size, you still want a specialist reading it. Three questions we gave our client for the seller: 1. When did you start recording inventory? 2. Was the opening balance backed by a physical count? 3. Where did the entry go: prior years, or this year's COGS? The answers told the story. Our client priced the deal on real earnings, not a bookkeeping change, and we caught it before any paid diligence started. (At Hood & Strong this is the free pre-LOI read we do before any QoE work begins.) Question for the group: Have you run into an accounting policy change right before a sale (inventory, revenue recognition, capitalizing costs)? What quiet changes do you look for before you sign an LOI? I'll be at the Booth-Kellogg ETA Conference next week and at the Thursday Oct 29 happy hour at Jefferson Tap (4:30-7 PM CT), so I'm happy to compare notes in person.