Quality of earnings
In accounting, quality of earnings means a diligence analysis, usually by an accounting firm before an acquisition or financing, of whether reported EBITDA is sustainable — normalizing and non-recurring adjustments, proof of cash, the net working capital peg. It gives no assurance and is not an audit.
- Layer
- Lexicon
- Defined in
- Lexicon
- Also called
- QoE
- Nearby
- 4
Not a rule
Transaction diligence practice — not codified. US GAAP governs recognition, measurement and presentation — not the mechanics a bookkeeper uses to get there. Anyone citing a standard for this word is citing the wrong thing.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- audit
- review
Nearby in the catalog
No component names this concept outright. These are the ones in its part of the system, which is a weaker claim — but a component nothing links to is a component nobody finds.
Terms this one depends on
Also in Equity & financing
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.