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What Is a Quality of Earnings (QoE) Report?

A plain-English answer, and why it matters when you actually sell.

Short answer: A quality of earnings, or QoE, report is an independent analysis that verifies a business's real, sustainable earnings. It normalizes profit, tests the add-backs, checks revenue recognition, and separates recurring from one-time income. Buyers order QoE in diligence; smart sellers order a sell-side QoE first so their numbers are already proven when they go to market.

Why Quality of Earnings (QoE) matters when you sell

Every buyer will scrutinize your earnings. A QoE gets there first. A sell-side quality of earnings report turns your books into a defensible, buyer-grade picture of profit, which does two things: it supports a higher multiple because the earnings are proven, and it removes the ammunition a buyer uses to retrade the price in diligence. It is one of the highest-return investments an owner can make before selling.

QoE is not an audit. It focuses on earnings quality: are the profits real, recurring, and transferable to a new owner. WETYR builds a QoE-grade view of the business as part of preparation, so you enter negotiations with your number already validated.

Frequently asked questions

Do I need a quality of earnings report to sell?
You are not required to, but a sell-side QoE usually pays for itself by supporting a higher price and preventing the buyer from re-trading you during diligence. On larger deals it is close to standard.
What is the difference between QoE and an audit?
An audit gives an opinion on whether financial statements are fairly presented. A QoE analyzes the quality and sustainability of earnings for a transaction, focusing on normalized, recurring profit rather than compliance.
Who pays for the QoE?
On the buy side, the buyer. A seller who commissions a sell-side QoE pays for their own, and it typically returns far more than it costs in preserved price.

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