# Quality of earnings

> Quality of earnings — 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.

Source: https://lopifi.com/glossary/quality-of-earnings
Part of: Lopifi — US GAAP books on autopilot, reviewed by a CPA (https://lopifi.com)

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**What is 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.

## Also known as

- QoE

## Words this system refuses for it

- audit
- review

- **Category:** Equity & financing
- **Specified in:** [Lexicon](https://lopifi.com/md/docs/domain/11-lexicon)
- **Related:** working-capital, ebitda