EBITDA the business can defend. Adjustments diligence can underwrite.
TEOL delivers sell-side and buy-side Quality of Earnings to the institutional standard buyers, lenders, and sponsors expect. Documented adjustments. Defensible normalizations. Working capital that holds. The earnings number the business carries into the event survives outside review.
TEOL Quality of Earnings is the institutional QofE work delivered inside transaction processes. The engagement documents and defends EBITDA adjustments, normalizes working capital, isolates one-time items, and produces the diligence-grade analysis buyers, lenders, and sponsors require. Sell-side and buy-side mandates are delivered to the same institutional standard.
Not a tax-style adjustment list. An institutional QofE.
The earnings number is the foundation. Build it on something that holds.
Quality of Earnings is the document diligence pressure-tests first. The work has to withstand it before the event begins.
QofE at TEOL is the institutional analysis required to enter or run a transaction. The work is documented, defensible, and diligence-grade.
Document
We document every adjustment to reported earnings with supporting evidence, methodology, and rationale. Owner add-backs, one-time items, accounting policy adjustments, related-party items — each documented to institutional standard.
Normalize
We normalize working capital, isolate non-operational items, and adjust for accounting treatments that obscure operating reality. The result is an EBITDA number that reflects how the business actually operates.
Defend
We build the QofE to be defended. Adjustments supported with source documentation. Methodology explained. Diligence questions anticipated. The earnings number is not just produced — it is staged to survive scrutiny.
The same institutional standard, applied to both sides of the transaction.
Sell-Side QofE
For businesses approaching a sale, recapitalization, or capital raise. TEOL builds the earnings narrative the seller carries into the process — adjustments documented in advance, working capital normalized, one-time items isolated, methodology defended. The earnings number the buyer's diligence team encounters is institutional, not optimistic.
Buy-Side QofE
For sponsors, acquirers, and capital providers evaluating an acquisition. TEOL pressure-tests the target's earnings, identifies undisclosed adjustments, examines working capital integrity, and stress-tests the EBITDA the seller is presenting. The output is a clear, institutional view of what the buyer is actually acquiring.
The pattern that brings businesses to TEOL.
Six conditions. One underlying need. The earnings number has to hold under diligence scrutiny.
A sale process is being prepared.
EBITDA must be defended before the buyer's diligence team examines it. Adjustments need to be documented in advance, not negotiated in real time.
A buy-side acquisition is under review.
The acquirer needs an independent, institutional view of the target's earnings — separate from the seller's representation, grounded in the business as it actually operates.
A refinancing or capital raise is approaching.
Lenders and capital providers underwrite to EBITDA. The earnings number must be defensible before the conversation begins, not after the term sheet is contested.
A sponsor transition is underway.
Incoming ownership requires a clear, institutional view of the earnings they are inheriting — including the adjustments that will define ongoing reporting expectations.
The internal EBITDA number has drifted from operating reality.
Owner add-backs have accumulated. One-time items have stayed in. Working capital has not been normalized. The reported EBITDA no longer reflects how the business actually operates.
Diligence has already begun and the response is not institutional.
The diligence process is underway, the data room is open, and the responses are not holding up. The QofE must be rebuilt mid-process, to standard, before the deal stalls.
How adjustments bridge to defensible EBITDA.
Select a category to see how it moves reported earnings toward sustainable earnings.
One-off items
Non-recurring costs that depressed reported earnings are isolated and removed.
Increases run-rate EBITDA.
How a TEOL Quality of Earnings engagement unfolds.
Six stages. Each with a defined output. Together, the diligence-grade earnings file the business carries into the event.
Earnings Baseline & Scope
The engagement opens with a baseline review of reported earnings, the operating model, the accounting policies in place, and the transaction context. The scope of adjustments is defined and the methodology for the work is established.
Adjustment Identification
Every adjustment to reported EBITDA is identified, classified, and sourced. Owner add-backs, one-time items, related-party transactions, accounting policy adjustments, and working capital normalizations are each examined and documented.
Working Capital Normalization
Working capital is normalized to operating reality. Seasonality assessed. Build-up and reversal patterns examined. Target working capital for the transaction calculated and defended.
Documentation & Defensibility
Every adjustment is documented to institutional standard — source documentation, methodology, rationale, supporting analysis. The QofE file is structured to withstand the diligence team's review.
Diligence Q&A Preparation
The questions diligence will ask are anticipated and the responses prepared in advance. The QofE is not just produced — it is staged for the conversation that follows.
Through-Process Support
TEOL supports the leadership team through the diligence process itself. Responses held to standard. New questions absorbed. The earnings narrative carries through to close.
The institutional QofE file the business carries into the event.
Six pillars. Each documented, supported, and structured to withstand outside review.
Documented EBITDA Adjustments
Every adjustment classified, sourced, and supported. Owner add-backs, one-time items, related-party adjustments, accounting policy normalizations — each documented to diligence standard.
Normalized Working Capital
Working capital examined, normalized, and benchmarked. Target working capital for the transaction defined and defended.
Quality of Revenue Analysis
Revenue concentration, recurring versus non-recurring, customer cohorts, and revenue recognition examined. The earnings number is anchored to revenue that holds.
One-Time and Non-Recurring Isolation
One-time items isolated, documented, and removed from ongoing earnings. The EBITDA the business carries into the event reflects steady-state operation.
Diligence-Grade Workpapers
The full workpaper file structured to institutional standard. Every adjustment traceable. Every methodology documented. The diligence team meets an organized response.
QofE Narrative & Defense
The earnings narrative built and held — written in a form that supports the seller's story or the buyer's evaluation, grounded in numbers that hold.
TEOL Quality of Earnings operates against the same documented institutional standard as the broader engagement.
Financial Truth Ladder
The five-stage maturity model from reactive accounting to institutional reporting.
Reporting Under Scrutiny Model
The reporting structure that survives lender, board, sponsor, and buyer review.
Capital Readiness Scorecard
The seven dimensions that determine how a business is read against a capital event.
Institutional Readiness Framework
The seven dimensions against which an institutional finance function is measured.
TEOL Quality of Earnings engagements are structured around the side of the transaction and the depth of the work.
Sell-Side QofE
A defined-scope engagement preparing the seller's earnings narrative in advance of a sale, recapitalization, or capital raise. Adjustments documented, working capital normalized, diligence Q&A staged. Typical duration measured in weeks.
Buy-Side QofE
A defined-scope engagement on the acquirer's behalf, pressure-testing the target's earnings, identifying undisclosed adjustments, and producing an institutional view of what is actually being acquired. Typical duration measured in weeks.
QofE Inside Transaction Finance Build
QofE delivered as one component of a broader Transaction Finance Build engagement. The earnings work runs alongside diligence readiness, narrative, cash discipline, and stakeholder communication — all built to the same institutional standard.
TEOL Quality of Earnings is the right format when the earnings number needs to be defended — by a seller entering a process, by an acquirer evaluating a target, or by a business preparing for a refinancing or capital raise. The work is documented, defensible, and structured to withstand outside review.
For businesses approaching an event without a broader transaction finance foundation already in place, QofE is most commonly delivered as one component of a Transaction Finance Build engagement — alongside diligence readiness, narrative, cash discipline, and post-close integration.
Compare Quality of Earnings and Transaction Finance BuildObservations from inside the earnings file.
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The diligence trail that decides the outcome before the meeting begins.
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Direct answers to direct questions.
What does TEOL Quality of Earnings do?
TEOL Quality of Earnings produces institutional-grade QofE analysis for sell-side and buy-side mandates. The engagement documents and defends every adjustment to reported EBITDA, normalizes working capital, isolates one-time items, and produces the diligence-grade workpapers buyers, lenders, and sponsors require.
How is TEOL QofE different from a Big Four QofE engagement?
Big Four QofE typically produces a defined-deliverable report under a standardized methodology. TEOL QofE is delivered with the same institutional rigor, but built into the broader Transaction Finance Build engagement when required — meaning the work connects directly to narrative, diligence readiness, cash discipline, and post-close integration. The output is comparable; the integration is different.
Does TEOL deliver sell-side and buy-side QofE?
Yes. TEOL delivers both. Sell-side QofE prepares the seller's earnings narrative in advance of a sale, recap, or capital raise. Buy-side QofE pressure-tests the target's earnings on behalf of an acquirer. The standard of work is identical on both sides.
How long does a QofE engagement take?
A standalone sell-side or buy-side QofE typically runs four to eight weeks depending on the scale and complexity of the business. QofE delivered inside a Transaction Finance Build engagement is staged across the broader window of the event.
What kind of business is TEOL QofE built for?
TEOL QofE works with established operating businesses across industrials, manufacturing, construction and construction-adjacent services, distribution, logistics, equipment rental, energy services, infrastructure, healthcare, and facility-based services. Ownership profiles include founder-led, family-held, sponsor-backed, and platform-structured.
What does it cost?
TEOL Quality of Earnings engagements are priced on a defined-scope basis, reflecting the side of the transaction, the complexity of the business, and the depth of the analysis. Pricing is mandate-specific. Details are shared in a private conversation.
Read the earnings before the buyer does.
QofE Pre-Read
Predict the adjustments a sell-side Quality of Earnings would surface — defensibility score, predicted QofE-adjusted EBITDA, and the adjustment waterfall.
BeginEBITDA Quality Calculator
A focused read on adjustments, normalizations, and run-rate defensibility — the financial-truth diagnostic.
BeginThe earnings number has to hold. We build it so it does.
Initial conversations are private and substantive. Where there is a fit, we define the work clearly and move quickly. Where there is not, we say so directly.