Quality of Earnings
Know your real number before a buyer tells you theirs.
A Quality of Earnings report answers one question: how much of reported profit is real, recurring and transferable. We build it the way lenders and buyers will test it, so the adjusted EBITDA you take to market holds.
Who it is for
Built for the decision in front of you.
- Owners preparing to sellFind and frame every issue before a buyer does, and turn add-backs into documented value.
- Buyers and search fundsTest the seller’s story, the revenue base and the cash conversion before you commit capital.
- SBA and conventional lendersA right-sized earnings analysis that supports underwriting and debt sizing.
What is included
Scope
Reported to adjusted, line by line, with support for every adjustment.
Owner compensation normalized to market, personal and one-time items documented.
Customer concentration, cohort trends, pricing and gross margin by line.
Bank deposits tied to reported revenue so the numbers reconcile to cash.
Trailing twelve month NWC trend that supports a defensible peg.
Accrued liabilities, deferred revenue and anything a buyer will deduct.
Deliverables
What you receive
Timeline: 3 to 6 weeks.
- QoE reportAn executive summary plus detailed schedules a buyer’s team can follow.
- Data bookExcel workbook with every schedule, linked to source.
- Readout sessionA working session with you, your banker or your lender.
Questions
Frequently asked
What is the difference between a QoE and an audit?
An audit asks whether the financial statements follow accounting rules. A QoE asks whether the earnings are durable and transferable to a new owner. A company can pass an audit while its QoE shows that a large share of profit depends on one customer or an under-market owner salary.
When should a seller commission a QoE?
Ideally three to six months before going to market. That leaves time to fix what it finds, substantiate add-backs and set a working capital peg before a buyer anchors the conversation.
Do lenders accept a sell-side QoE?
Many lenders and buyers rely on a well-built sell-side report or use it to scope their own work, which shortens diligence. Some will still commission their own. Either way, the seller arrives with answers rather than surprises.
Which add-backs hold up?
Add-backs that are documented, non-recurring or clearly personal tend to hold. Vague owner perks, “one-time” items that recur every year and pro forma savings without evidence are the first to be challenged.
Related services
Accounting and Bookkeeping
Books, monthly close and reporting that management, lenders and buyers can rely on, on the platforms you already use.
Business and Individual Tax
Individual and business returns, planning, notices and representation across entity types and all 50 states.
CFO Advisory
Senior financial leadership without a full-time seat: forecasting, cash flow, KPIs and board and lender reporting.
Next step
Talk with an advisor about Quality of Earnings.
Thirty minutes, no obligation. You will leave with a clear view of scope, timing and fee.
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