QoE Report Template — Structure, Sections & Schedules
Published February 2026
A well-structured QoE report tells a clear story — from headline findings to the granular schedules that support them. Here's the template professional analysts use.
7–10
Sections in a standard QoE report
3–5 years
Typical analysis period
20–50+
Common EBITDA adjustments reviewed
Report Structure Overview
A Quality of Earnings report follows a logical structure that starts with high-level findings and drills into supporting detail. Whether prepared by a Big 4 firm or generated on an AI-assisted platform, the core sections are consistent.
Executive Summary
Headline findings, adjusted EBITDA, key risks, and deal considerations
EBITDA Adjustment Schedule
Bridge from reported to adjusted EBITDA with categorized adjustments
Revenue Analysis
Revenue quality, concentration, recurring vs non-recurring, trends
Expense Analysis
COGS, operating expenses, owner compensation, SG&A trends
Working Capital Schedule
Normalized NWC, peg calculation, component analysis
Proof of Cash
GL-to-bank reconciliation validating completeness of recorded transactions
Balance Sheet Review
Asset quality, unrecorded liabilities, debt-like items
Management Adjustments
Seller-proposed adjustments with validation and supporting documentation
Executive Summary
The executive summary is what buyers, lenders, and deal committees read first. It should answer: "What is the true earning power of this business?"
Adjusted EBITDA range
Present a range if certain adjustments are debatable, with a midpoint best estimate
Key adjustments
Highlight the 3–5 largest adjustments and their net impact
Revenue quality summary
One-paragraph assessment of revenue sustainability and concentration
Risk factors
Top 3–5 risks identified during analysis with potential financial impact
Data quality assessment
Comment on completeness and reliability of source data
EBITDA Adjustment Schedule
The EBITDA bridge is the centerpiece of any QoE report. It starts with reported net income and systematically adds back interest, taxes, depreciation, and amortization, then applies normalization adjustments to arrive at adjusted EBITDA.
Non-recurring items
One-time legal fees, restructuring, PPP income, insurance settlements
Owner adjustments
Above-market compensation, personal expenses, related-party transactions
Pro forma adjustments
Known changes: new hires, lost customers, lease changes, regulatory costs
Accounting adjustments
Reclassifications, accrual corrections, timing differences
Revenue Analysis Section
The revenue section of a QoE report provides the analytical detail behind the executive summary's revenue quality assessment. See our complete revenue quality guide for detailed methodology.
Expense Analysis Section
COGS validation
Verify cost of goods sold is consistently calculated and accurately captures direct costs
Payroll analysis
Owner compensation normalization, headcount analysis, benefit costs
Rent & occupancy
Below-market related-party leases, upcoming lease renewals, deferred maintenance
SG&A trends
Identify unusual patterns, missing costs, or expenses that should be reclassified
Working Capital Schedule
The working capital schedule is a standalone section that feeds into both the QoE analysis and the purchase agreement. See our working capital analysis guide for detailed methodology.
Proof of Cash
Proof of cash reconciles the general ledger's recorded transactions to actual bank activity. It's a powerful completeness test — if cash in the GL doesn't match cash at the bank, something is missing. See our cash and bank tie-out guide.
Management Adjustments
Sellers often propose their own adjustments — typically add-backs that increase EBITDA. The QoE report should evaluate each management adjustment:
Documentation review
Is the adjustment supported by invoices, contracts, or other verifiable evidence?
Reasonableness test
Is the adjustment amount reasonable relative to the underlying transaction?
Classification
Is this truly non-recurring, or is the seller relabeling a normal operating cost?
Validation status
Validated, partially supported, insufficient evidence, or contradicted by data