Answers to the most common questions from buyers, searchers, brokers, and sellers considering a Quality of Earnings report.
A Quality of Earnings (QoE) report is an independent financial analysis that examines whether a business's reported earnings accurately reflect its underlying economic reality. It's not an audit — it's a focused investigation into the quality and sustainability of a company's profits.
The central output is an adjusted EBITDA figure — earnings cleaned of non-recurring items, owner-specific expenses, and distortions — that a buyer and their lender can rely on to underwrite a deal. Read the full explainer →
An audit is a formal attestation — an accounting firm certifying that financial statements comply with accounting standards. A QoE is an investigative analysis focused on economic reality, not compliance.
QoE analysts ask different questions than auditors. Not "are these numbers GAAP-compliant?" but "are these earnings real, recurring, and representative of what a buyer will own?" For most private business acquisitions under $50M in revenue, a QoE delivers far more decision-relevant information than an audit would.
Earnings quality refers to how reliable, recurring, and representative a business's reported profits are. High-quality earnings come from sustainable revenue sources, reflect real cash generation, and hold up across multiple periods. Low-quality earnings may be inflated by one-time events, pulled-forward revenue, aggressive addbacks, or accounting choices that won't persist under new ownership.
A QoE report systematically measures earnings quality and translates it into a number — adjusted EBITDA — that a buyer can actually underwrite.
Yes — and QoEPro is built specifically for your situation. ETA searchers and independent sponsors are our primary clients. You need institutional-grade diligence output without a Big 4 price tag or a 6-week timeline.
The QoE Lite and Standard QoE tiers are both designed to fit a typical search fund deal timeline and SBA lender requirements. Many searchers find that a QoE pays for itself many times over in purchase price adjustments identified during diligence.
Absolutely — that's our primary use case. Buy-side QoE engagements are exactly what QoEPro is built for. We approach the seller's financials with independent skepticism, looking for the risks and discrepancies that could affect your purchase price, deal structure, or post-close performance.
Yes. A sell-side QoE was commissioned by the seller and is designed to present their financials in the most favorable defensible light. It's a marketing document as much as a financial one. Accepting a sell-side QoE in lieu of your own is the equivalent of using the seller's home inspector when buying a house.
A sell-side QoE can be valuable as a starting point — use it as a reference to understand what the seller is claiming, not as a substitute for independent analysis. Read more: Buy-Side vs. Sell-Side QoE →
Yes, we accept sell-side engagements. A seller-commissioned QoE can compress buyer due diligence timelines, signal transparency, reduce the risk of a retrade, and give your deal a material advantage in competitive processes. That said, our primary focus is buy-side diligence — we work with more buyers than sellers.
Here's the general guidance:
Not sure? Schedule a free scoping call and we'll recommend the right tier for your situation.
The key difference is the depth of analysis. QoE Lite covers 3 years of annual financials — it gives you a clean adjusted EBITDA and addback schedule but does not drill down to the monthly level. It's designed for LOI stage when you need credible numbers fast.
Standard QoE covers 3–5 years on monthly financials — it can identify seasonal patterns, revenue timing issues, and trends that only show up when you look at the numbers month by month. It also adds working capital peg analysis, key reconciliations (cash proof, payroll rec, book-to-tax rec), and debt-like items — the full set of outputs a lender will scrutinize.
Yes. Available add-ons include:
Discuss add-ons during your scoping call or note them in your intake form.
The process has four steps:
Every QoEPro engagement is authored by a CFA charterholder with live lower middle market deal experience. We don't staff engagements to junior analysts or offshore teams. QoEPro is a service of Lilac Street Capital LLC, an M&A transaction advisory practice based in Austin, Texas.
Every report includes a 30-minute debrief call where we walk through the findings, explain the methodology behind each adjustment, and answer any questions your lender, attorney, or investors may have. One round of revisions is included if new information is provided or if there are factual corrections needed.
Requirements vary by tier:
We'll confirm the exact documentation checklist during your intake or scoping call before work begins.
Often yes — and messy books are common in lower middle market businesses. We're experienced at working with QuickBooks exports, compiled financials, and spreadsheet-based records. We'll let you know during the scoping process if the documentation is too incomplete to support a meaningful analysis, before you've committed to payment on higher-tier reports.
After ordering, you'll receive a secure intake form with instructions for uploading documents. We do not accept sensitive financial documents via email. All uploaded documents are handled with strict confidentiality and used solely for the specific engagement for which they were provided.
All turnaround times begin once all required documentation has been received — not from the date of order.
Rush delivery is available as an add-on for time-sensitive deals. Contact us to discuss availability.
Possibly. The CIM Snapshot (1–2 business days) and QoE Lite (5 business days) are designed for fast turnarounds. Rush delivery add-ons are also available depending on current capacity. Contact us immediately at info@qoepro.com or book a call — we'll be direct about whether we can meet your timeline.
All reports are delivered as a polished PDF document. Standard QoE and Comprehensive QoE reports also include an accompanying Excel workbook with the underlying EBITDA bridge, addback schedule, and supporting analysis — so you can review the model directly and share it with lenders or investors. The Lender-Ready Formatting add-on further enhances the PDF exhibit structure specifically for SBA and conventional lender review.
Add-ons are priced separately. See the full order page for details →
Payment is due at the time of order for CIM Snapshot and QoE Lite — processed via Stripe. For Standard QoE and Comprehensive QoE, we do a free scoping call first to confirm scope, then invoice for payment before work begins. All fees are non-refundable once work has commenced.
Fees are non-refundable once work has commenced, regardless of whether the deal closes. The analysis itself has value independent of any specific transaction — the findings from a QoE can inform your next deal, help you re-approach the seller on adjusted terms, or serve as documentation for investors. We understand deals fall through; it's part of the process.
Yes. Our reports follow the format and documentation standards expected by SBA 7(a) lenders and most conventional acquisition lenders. The Lender-Ready Formatting add-on further optimizes the exhibit structure for lender review. We recommend confirming your specific lender's requirements early — some will specify that the QoE must be buyer-commissioned, which our reports are by default.
For SBA financing on a typical lower middle market deal, the Standard QoE ($6,997) is the right choice. It covers the full scope that SBA underwriters expect — monthly-level analysis, working capital peg, reconciliations, addback documentation, and debt-like items. If you're not sure what your lender specifically requires, share the request with us during your scoping call and we'll confirm the right fit.
Yes — we have a broker referral program for M&A brokers and sell-side advisors who want to offer clients a credible, independent QoE as part of a well-prepared listing package. A QoE in your listing compresses buyer due diligence timelines, reduces the probability of a retrade, and gives your deal a material advantage in competitive processes.
Yes. Brokers who refer multiple engagements per year receive preferred pricing across our report tiers. Contact us to discuss your current deal pipeline and we'll put together a simple partner arrangement. Get in touch →
Book a free 30-minute call and we'll answer any questions about your deal — no sales pressure, no commitment required.