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Buy-Side Quality of Earnings

Know What You're Actually Buying.

A seller's financial package tells you the story they want you to underwrite. Buy-side QoE tests that story against the underlying evidence—adjusted EBITDA, addbacks, cash, revenue quality, working capital, and the items that can change price or cash needed at close.

Direct purchase available for CIM Snapshot and QoE Lite. Standard and Comprehensive engagements begin with a scoping call.
Illustrative buy-side finding
Adjusted EBITDA Bridge
3 flags
$1.42M
Reported EBITDA
$1.27M
QoE Adjusted
($142K)
Unsupported addbacks
$96K
NWC shortfall
What changes the deal: Unsupported addbacks reduce underwritten earnings, while the working-capital shortfall changes cash needed at close.
Senior-ledTimothy Vance, CFA
Evidence-basedSource documents, not seller narrative
Transaction-focusedLower middle market M&A
IndependentOne deal, one side

What earnings should you actually underwrite?

A Quality of Earnings report is not an audit and it is not a valuation opinion. It is financial diligence designed to determine whether reported earnings reflect the economic reality you are buying and what else in the financials could affect transaction economics.

Test seller addbacks and normalization adjustments
Reconcile earnings to cash, tax, and payroll support
Analyze revenue, customer, and margin quality
Establish normalized working capital and seasonality
Identify debt-like or transaction-like items
Surface accounting inconsistencies and diligence flags
Is adjusted EBITDA supported by evidence?
Which seller addbacks survive scrutiny?
Does cash conversion support the earnings story?
What working-capital peg is economically reasonable?
Are there customer, revenue, payroll, or margin risks?
What should change your underwriting or negotiation?

Start at the level of diligence the deal deserves.

The two lighter scopes can be purchased directly. Standard and Comprehensive work begins with a scoping call so the analysis matches the complexity, data quality, lender requirements, and timeline of the transaction.

Buy-Side Only

CIM Snapshot

$349
1–2 business days
Best for: Pre-LOI target screening

High-level screen of the CIM and seller-provided financials. Not a full QoE.

  • Asking multiple / reported EBITDA sanity check
  • High-level addback review
  • Three key diligence flags
  • PDF summary + debrief
Pay & Start →
Secure payment via QuickBooks/Intuit
Focused QoE

QoE Lite

$1,999
5 business days
Best for: simpler acquisitions / focused annual analysis

Focused three-year annual review with documented addback and earnings-quality analysis.

  • Annual EBITDA bridge
  • Addback support review
  • Revenue / margin analysis
  • PDF report + Excel workbook
Pay & Start →
Secure payment via QuickBooks/Intuit
Complex / Deeper Diligence

Comprehensive QoE

$15,000
10–15 business days
Best for: complex businesses / broader diligence

Standard QoE plus deeper management, revenue, customer, operational, and transaction analysis tailored to the deal.

  • Everything in Standard
  • Management interviews
  • Deeper revenue / customer analysis
  • Operational risk review
  • Lender / investor coordination as scoped
Schedule Call →
Scoping call required before engagement.

Simple intake. Serious output.

01

Choose or scope

Buy CIM Snapshot or QoE Lite directly, or schedule a call for Standard / Comprehensive.

02

Provide the evidence

Financial statements, GL data, addback support, bank/tax/payroll records as required by scope.

03

Use the findings

Receive the report, workbook, and a clear discussion of what matters to underwriting and negotiation.

Not sure whether Lite is enough?

If the books are messy, the business is complex, a lender is involved, or working capital matters materially, schedule the scoping call before paying. We'll tell you which scope makes sense.

Talk Through the Deal →

Common buyer questions

Do I still need my own QoE if the seller has one?

A seller-side QoE can be useful, but it was commissioned to prepare the seller for market. A buyer-side engagement is directed by the buyer's underwriting questions and provides work product to the buyer. For meaningful transactions, many buyers still want independent buy-side diligence.

Is the CIM Snapshot a full Quality of Earnings report?

No. It is a pre-LOI or early-stage screen designed to identify obvious issues and questions. It does not include the source-document testing, reconciliations, or working-capital work in the Standard QoE.

Which tier is appropriate for an SBA-financed acquisition?

Lender requirements vary. If a lender has requested a QoE, confirm their expectations before ordering. Standard QoE is designed around the types of monthly analysis, reconciliations, and working-capital work commonly relevant to acquisition underwriting, but the lender ultimately decides what it requires.

What if the seller's books are messy or cash-basis?

That generally increases the importance of scoping before you buy a fixed package. Schedule a call so we can assess the records, determine what can be reconstructed, and identify whether the Standard or a custom scope is appropriate.

One Deal. One Side.

QoEPro serves both buyers and sellers, but never opposite sides of the same transaction. Once engaged by one side, we remain independent of the other.

Stay useful between deals

The QoEPro Deal Brief

Occasional practical notes on earnings quality, addbacks, working capital, diligence issues, and lower middle market transactions. Written for people doing real deals—not a daily marketing blast.