QoE (Quality of Earnings)

Quality of Earnings (QoE) is a critical due diligence process that provides a deep dive into a company's financial performance. Unlike standard financial statements, a QoE report uncovers the underlying economic reality of a business, highlighting sustainable revenue streams, normalized expenses, and true earning power.

The analysis typically covers multiple years, focusing on revenue quality, expense normalization, working capital dynamics, and EBITDA adjustments. It helps potential buyers understand the real financial health of a company beyond surface-level numbers.

Sophisticated sellers use QoE proactively to optimize their business's value, identifying and addressing potential red flags before entering the market.