{
  "title": "What is a quality of earnings (QoE) report? Definition and example",
  "url": "https://acquisitions.com/blog/what-is-a-quality-of-earnings-report/",
  "author": "Moran Pober",
  "publisher": "Acquisitions.com",
  "published": "2026-10-23",
  "updated": "2026-10-23",
  "section": "Glossary",
  "keyword": "Quality of earnings (QoE)",
  "short_answer": "A quality of earnings (QoE) report is an independent review of a company's profit, written by an accounting firm for a buyer or lender. It tests whether reported earnings are accurate, repeatable and backed by cash, and it restates EBITDA after removing one-time items, owner perks and accounting errors.",
  "facts": {
    "Reported EBITDA (seller's P&L)": [
      "$1,000,000",
      "Starting point from the broker's package"
    ],
    "Add: one-time legal settlement": [
      "+$60,000",
      "Paid once, will not repeat"
    ],
    "Add: owner salary above market": [
      "+$40,000",
      "Owner took $190,000; a manager costs $150,000"
    ],
    "Less: revenue booked early": [
      "−$85,000",
      "December invoices for January work"
    ],
    "Less: bonuses earned but not accrued": [
      "−$35,000",
      "Staff bonuses paid after year end"
    ],
    "Less: rent below market": [
      "−$30,000",
      "Owner's building leased to the business cheaply"
    ],
    "QoE-adjusted EBITDA": [
      "$950,000",
      "What a buyer should price"
    ]
  },
  "sources": [
    "https://www.investopedia.com/terms/q/qualityofearnings.asp",
    "https://www.sba.gov/funding-programs/loans/7a-loans"
  ],
  "license": "Facts may be quoted with attribution to Acquisitions.com and a link to the url above."
}