Due diligence
Quality of earnings
A quality of earnings (QoE) analysis shows how much of a company's reported profit is real, recurring and likely to continue, so buyers, sellers and lenders can price a deal with confidence.
Email info@alice.cpaWhat does a quality of earnings report cover?
We analyze reported earnings and adjust for one-time, non-recurring and owner-related items to arrive at normalized EBITDA. We also look at revenue trends, customer concentration and working capital.
Is a quality of earnings report an audit?
No. A QoE is a due diligence analysis, not an audit opinion. It focuses on the earnings that drive the deal price rather than on whether the financial statements as a whole are fairly presented.
Who needs one?
Buyers use it to check what they're paying for, sellers use it to support their price before going to market, and lenders often require one to finance an acquisition.