Quality of Earnings

Find the adjustments
before the buyer does

Reported profit taken apart and rebuilt as the earnings a buyer will actually pay for. Before they find it.

Diligence-grade analysis, not an audit or an assurance opinion

Selected clients across the US, GCC and Europe

2 sides

Run it on yourself, or on the target

The analysis is the same discipline pointed in opposite directions. One protects your price, the other protects your capital.

Sell-side QoE


  • Find the adjustments before a buyer's advisers do
  • Defend EBITDA rather than concede it line by line
  • Clean up revenue recognition ahead of the data room
  • Set the working capital peg from your own analysis
  • Go to market with the answers already written down

Buy-side QoE


  • Test whether the earnings you are pricing are real
  • Separate sustainable profit from one-off and owner benefit
  • Check customer concentration and revenue durability
  • Price the working capital and net debt properly
  • Walk into negotiation knowing where the number is soft

Lender QoE


  • Normalised earnings a credit committee will accept
  • Covenant headroom tested against adjusted EBITDA
  • Cash conversion evidenced rather than asserted
  • Debt capacity based on earnings that repeat

Readiness review


  • A lighter version, run 6 to 12 months before a sale
  • Names what would fail diligence today
  • Gives you time to fix it rather than discount for it
  • Often the cheapest work we do, measured on outcome
Scope

What we test, and what we will not claim

Every adjustment is evidenced, quantified and traceable to source.

What the report covers
Normalised EBITDAReported profit rebuilt with one-offs, owner benefit, related-party charges and non-recurring items adjusted out, each one evidenced.
Revenue recognitionCut-off, accrual and deferral testing, plus whether revenue is recognised on a basis a buyer will accept.
Revenue durabilityCustomer concentration, churn, contract terms and how much of the base is genuinely recurring.
Working capital and net debtA normalised working capital level for the peg, plus debt-like items that belong in the price.
Proof of cashEarnings reconciled to cash actually collected, because that is the first thing a serious buyer checks.
What this is not
An auditWe issue no audit opinion and provide no assurance. If you need an audit, you need a licensed audit firm.
A tax or legal opinionTax exposure and contract risk sit with your tax preparer and your counsel. We flag what we see and stop there.
A valuationA QoE produces the earnings. What multiple applies to them is a separate piece of work.
A number shaped to the dealWe will not adjust something out because it helps the price. Adjustments have to survive the other side reading them.

Need the multiple as well as the earnings? Business valuation is priced separately.

See business valuation
An adjustments schedule beside its source documents
The evidence file

Every adjustment traced to a source document

Each normalisation carries the schedule, the invoice and the reason it was made, so a buyer’s advisor can follow the same trail.

Process

15 business days, 4 stages

The clock starts when access and the data request are answered, not when the calendar allows.

4 steps
  1. Days 1 to 3
    01

    Request

    A written data request, then a working session on how revenue is earned and where the books are weakest.

    A data request
  2. Days 4 to 10
    02
    Rebuild

    Test

    Monthly trial balances rebuilt, revenue tested to source, and every candidate adjustment quantified.

    A full schedule
  3. Days 11 to 13
    03
    Normalise

    Challenge

    We walk the adjustments with you and argue the ones a counterparty will contest, before they get the chance.

    Defended lines
  4. Days 14 to 15
    04

    Report

    A written report with the databook behind it, plus a session so you can hold every line in a live call.

    Report + databook
Case studies

Sell-side, with the buyer already at the table

The adjustments needed to turn reported profit into a defensible number were larger than the reported profit itself.

Independence

Nothing in our fee depends on the answer

A number is only worth what the independence behind it is worth.

What we do not have
Nothing to license youNo platform, seat or subscription, so no conclusion of ours quietly routes you toward a product we own.
No audit to protectWe do not audit or attest, so we are never signing an opinion while depending on management staying happy with us.
No success feeThe fee is fixed in writing before we begin. It does not rise with the number we arrive at, or with the deal closing.
What that buys you
A number we will defendIncluding when it is lower than you hoped. There is no version of this engagement where we are paid more for optimism.
Blunt on a thin assumptionWe can say an input does not hold, because nothing of ours is at risk if we do.
One fee, agreed up frontNo hourly meter, so thoroughness costs you nothing extra and there is no incentive to stretch the work.
Our guarantee

What we guarantee, and what we cannot

We are answerable for finding what the records contain and evidencing it properly. We are not the auditor, and we do not decide the deal.

We are answerable for
Every adjustment evidencedEach normalisation traced to source, so it survives a challenge from the other side.
A complete databookThe workings handed over in full, not a summary you cannot interrogate.
Findings raised as foundNothing held back to the final report. If it is material, you hear it that week.
The delivery window15 business days from a complete data set, agreed before we begin.
We are not
An audit opinionThis is not an audit and does not carry assurance. We say so in the report itself.
The buyer\u2019s conclusionWe can remove surprises. We cannot control how a counterparty reads them.
The priceFindings inform a negotiation. They do not settle it.
Records that do not existWhere the books are absent rather than messy, bookkeeping comes first.
Pricing

Priced on the state of the books, not the size of the deal

The fee tracks how much work the records need, never a percentage of the transaction.

Quality of earnings | fixed fee
Scope 1

Readiness review

$1,750/ report

Single entity, clean-ish books, run ahead of a process rather than inside one. Names what would fail diligence while there is still time to fix it.

  • 24 months plus LTM tested
  • Normalised EBITDA with evidenced adjustments
  • Revenue recognition and cut-off review
  • Written report and adjustment schedule
Scope 2

Full QoE

$4,500/ report

Sell-side or buy-side inside a live process. The report a counterparty and their advisers will read line by line.

  • Everything in Scope 1
  • 36 months plus LTM, monthly trial balances rebuilt
  • Working capital peg and net debt analysis
  • Customer concentration and revenue durability
  • Proof of cash reconciliation
  • Databook handed over with the report
Scope 3

Complex

$7,500/ report

Multi-entity or multi-currency groups, carve-outs, roll-ups, or books that need rebuilding before they can be tested at all.

  • Everything in Scope 2
  • Group consolidation and intercompany elimination
  • Carve-out and standalone cost analysis
  • Multi-currency translation review
  • Attendance at diligence calls with the counterparty

These are the published figures, fixed in writing before work begins. Every other fee we charge sits on one page.

Compare with every other fee

Fees are fixed before work begins and never a percentage of the transaction. This is diligence-grade analysis, not an audit: no opinion, no assurance. Rebuilding books first is quoted separately.

Questions

Asked before every engagement

Is a QoE the same as an audit?

No. An audit opines on whether statements are fairly stated. A QoE asks how much of that profit is real, repeatable and worth paying for.

Will a buyer accept your report?

Buyers accept evidence, not letterheads. Every adjustment is quantified and traceable to source, which is what their advisers test. Some will still run their own; ours shortens that work.

When should a seller run one?

Six to 12 months before going to market if possible. Found early, an issue gets fixed. Found in diligence, it gets priced against you.

What do you need to start?

Monthly trial balances for the period, the general ledger, bank statements, the customer revenue detail and any contracts that matter. We send a written data request on day one.

Our books are messy. Is that a problem?

It is the normal starting point, and exactly what a buyer will find. If the records need rebuilding before they can be tested, we quote that separately.

Do you take a percentage of the deal?

Never. The fee is fixed before work begins and does not move with the transaction, because an adviser paid on completion has a reason not to find things.

How much of our time will this take?

Mostly document gathering, around 6 hours spread across 3 weeks. We chase the detail ourselves once we have access.

What do we keep at the end?

The report and the databook, including every adjustment and the evidence behind it.

Will this stop a buyer re-trading the price?

Not always. It removes the surprises that would justify a re-trade, which is the part anyone can control. A buyer who wants a discount will still ask for one.

Contact

Find it first,
on your own terms

Book a call and get a fixed-fee scope within 24 hours. Tell us which side of the table you are on and how soon the process starts.

What happens next
  • 1

    Free consultation

    Which side you are on, the period involved, and the state of the records.

  • 2

    Fixed-fee scope

    Scope, period and price in writing within 24 hours, never a percentage of the deal.

  • 3

    Data request

    50% deposit and a written data request start the 15 business days.

  • 4

    Report and databook

    The written report, the supporting databook, and a session to defend every line.