Quality of Earnings (“QoE”) analysis is an essential tool in understanding a business’ true historical and future earnings. The use of QoE reports differs based on the purpose and requestor (buyer/seller) of the analysis, however, the intention is always to eliminate bias and to give an accurate view for both parties.
A seller might undertake a QoE report to better understand true earnings, allowing them to negotiate a higher and better sale price. Often, there are numerous non-recurring expenses which the seller is motivated to addback to improve earnings or sale price. QoE reports can also help a seller identify discrepancies early on to explain them better to a potential buyer and mitigate the probability of a lost deal.
The white paper highlights key adjustments, metrics, and analytical focus areas used in QoE to provide a clearer picture of long‑term performance and risk.
