Quality of Earnings (QoE)

Thinking about buying or selling a business? Before you shake hands or sign a deal, you need to know if the earnings are real—and how solid they are.

That’s what Quality of Earnings (QoE) reporting is for. We take a deep look at where the money is coming from, how reliable it is, and what’s likely to change after the deal.

This isn’t basic bookkeeping. This is deal-level financial clarity.

Why QoE Reports Matter

When a business is for sale, the numbers might look fine on the surface—but that doesn’t mean they tell the whole story.

A Quality of Earnings report helps you:

• Understand true operating income (not just what’s on the P&L)

• Separate recurring revenue from one-time windfalls

• Adjust for owner perks, personal expenses, or unusual activity

• Identify customer or vendor concentration risk

• Spot trends that might not hold up post-sale

• See how cash flow really works behind the scenes

It’s about knowing what you’re really buying—or making sure your buyer sees the full value of what you’ve built.

What We Do

We take your financials and dig deep. Here’s what that looks like:

• Clean and normalize the income statement

• Adjust for non-operating income or expenses

• Review working capital and cash flow

• Analyze gross margins and profit trends

• Flag any red flags (like late payments or over-reliance on one client)

• Break down recurring vs. non-recurring revenue

• Identify seasonality or growth factors

• Package the data into a clear, credible report

We build reports that hold up under pressure—whether you’re presenting to buyers, investors, or internal stakeholders.

Who This Is For

QoE reports are critical for:

• Business owners preparing to sell

• Buyers doing due diligence

• Investors evaluating a deal

• Brokers or advisors needing clean financials to support valuation

• Anyone doing M&A work who wants the real numbers—not just what’s on paper

Even if you’re not ready to sell yet, having a QoE report can help you understand how to build value.

Real-Life Example

A buyer in Seattle was looking at a marketing agency that claimed $400K in net income. Our QoE review found $100K of that was from one-time projects that weren’t likely to return. That gave the buyer leverage—and kept them from overpaying.

We also helped a seller in Memphis who had been running personal expenses through the business. We cleaned up the financials, adjusted for owner add-backs, and helped them justify a higher valuation to the buyer.

What We Review

We dive into:

• QuickBooks or Xero files

• Tax returns

• Payroll and contractor reports

• Sales and merchant data

• Customer and vendor breakdowns

• Financial statements going back 2–3 years

• Forecasts and budgets (if available)

You don’t need to have everything perfect—we’ll help you get it there.

Local Expertise. Nationwide Support

We’re based in Seattle, help clients in Portland, Memphis, and work with buyers, sellers, and brokers across the U.S. Our QoE work is done remotely, with secure file sharing, clear timelines, and no jargon.

Know What You’re Getting Into—or What You’re Worth

A good QoE report can help you close the deal, avoid a bad one, or strengthen your position at the table.

We’ll help you see what’s real, what’s risky, and what needs fixing.

Flat-rate reporting. Honest feedback. Built for real-world deals.