A directional read on what a sell-side Quality of Earnings examination may flag, before you commission one.
Before you commission a quality of earnings review, you can check which adjustments you can defend. This tool asks about six areas: profit adjustments, revenue, working capital, accounting, related parties and your forward view. Enter your reported profit and answer the questions to see a directional range and the supporting records to check. This estimate is not a commissioned examination.
Fixed fees for quality of earnings
This is a predictive directional read, not a commissioned Quality of Earnings examination. Actual outcomes depend on the examination scope, provider methodology and factors this tool does not collect.
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Before you begin
An examination that rebuilds a business's profit figure from source records rather than accepting the reported number. Buyers commission them as standard in most transactions. The report becomes the number the deal is actually priced on.
It varies with size and complexity, and it is normally a matter of weeks rather than days. The more relevant question for a seller is usually what it will find, because the cost is small relative to the adjustments it can surface.
The most common categories are owner compensation and personal costs, one-off items, revenue recognition timing, accounting policy changes, related-party transactions, and anything that changes the forward run-rate. Documented positions tend to be accepted. Undocumented ones tend to be rebuilt.
The same examination with opposite incentives. A sell-side review, commissioned by you, aims to establish and defend a figure before a process. A buy-side review, commissioned by the acquirer, is looking for every adjustment that lowers the number they pay a multiple of.
Dealings between the business and its owners, their family, or another company they own: rent paid on premises you own, loans between your entities, family on payroll. They matter because a buyer has to work out what those costs would be at arm's length, and an undisclosed one found late damages trust in everything else.
If you expect real scrutiny, it is worth considering. The argument for it is that you find the adjustments first and decide how to present them, rather than seeing them for the first time in a buyer's report during negotiation.
A few of the questions and inputs you will see. Your answers and results stay in the diagnostic.
Use the QofE Pre-Read to make a directional read of your business. This is not a lender quote, valuation opinion or commissioned diligence report.
Provide your details and work through 24 inputs and a reported EBITDA figure across six categories. Allow about 25 minutes; your pace may vary.
Enter the figures you can evidence and review how a buyer or quality-of-earnings provider could interpret the inputs and assumptions.
Read a directional adjusted EBITDA range and defensibility scores. The output is indicative, not a formal quote or verified diligence opinion.
Review the recommended actions where gaps qualify. If no areas need remediation, maintain the evidence and revisit the read when your circumstances change.
Choose the next question you want to examine:
The QofE Pre-Read uses your reported EBITDA and answers across six categories to produce a directional adjustment range. It does not reproduce a commissioned quality of earnings examination or verify your records.
EBITDA Normalization measures predicted adjustments from owner add-back rejection, one-time item normalization, and non-recurring expense category review. Predicted adjustment magnitude is calibrated to documentation defensibility per category.
Revenue Quality and Recognition measures predicted adjustments from revenue recognition policy variance, material revenue event normalization, deferred revenue treatment, and customer credit pattern analysis.
Working Capital Normalization measures predicted EBITDA impact from working capital methodology variance, seasonality documentation gaps, non-operating items, and growth normalization absence.
Accounting Policy and Consistency measures predicted adjustments from accounting method inconsistency, accrual discipline gaps, policy changes in lookback period, and audit or review quality trajectory.
Related-Party and Off-Balance-Sheet measures predicted adjustments from undocumented related-party transactions, owner-related real estate, off-balance-sheet commitments, and contingent liabilities.
Run-Rate and Pro-Forma Defensibility measures predicted adjustments from material events requiring run-rate normalization, pro-forma documentation gaps, forward-looking normalizations, and synergy or cost action documentation.
The tool combines your reported EBITDA with 24 inputs to show low, mid and high indicative deductions by category and an adjusted EBITDA range. A separate defensibility score (0–100) maps to four risk bands. Those bands do not represent measured rejection rates or the result of an independent examination.
This is a directional model, not a substitute for a commissioned quality of earnings examination. A provider may reach a different result after inspecting source records and applying its own methodology.
The adjustment coefficients are calibrated to general market data and TEOL's frameworks. Results are general guidance, not advice, and can contain errors.
Working capital and related-party items are shown here as EBITDA adjustments to keep the read simple. In a commissioned Quality of Earnings, the working capital peg usually adjusts the purchase price at closing rather than EBITDA, and some contingent items are treated as debt-like. Treat these lines as exposures to discuss with your advisers, not settled EBITDA deductions.
Sector multiples, adjustment ranges and stress factors in this tool are TEOL's illustrative calibrations, based on general market observation and TEOL's frameworks. They are not drawn from a single dataset and do not predict any specific outcome.