Quality of Earnings (QoE) Analysis in Financial Due Diligence

When preparing a business for sale, the Quality of Earnings (QoE) report often becomes a centerpiece of the process. But what exactly is it, and why does it matter so much?

A QoE report dives deep into a company’s earnings, separating recurring revenues from one-time windfalls and identifying trends, risks, and irregularities. It answers a key question for potential buyers: “Is this business’s financial performance sustainable in the future?”