QoE
Business & Finance abbreviation · Finance
| Stands for | Quality of earnings |
|---|---|
| Categories | Business & Finance |
QoE stands for Quality of earnings, a finance abbreviation.
Due diligence analysis, usually by an accounting firm, that tests whether a target company's reported earnings are accurate, recurring and sustainable. It adjusts EBITDA for one-off items, accounting errors and owner-related expenses.
Example: The QoE report trimmed adjusted EBITDA from $12 million to $10.4 million after removing a one-time contract.
Usage notes
A QoE is standard in mid-market private equity deals and is often commissioned by sellers (to prepare) as well as buyers (to verify). Unlike an audit, it gives no formal opinion, but lenders frequently rely on it to size acquisition debt.
Related abbreviations
More finance abbreviations
- OpEx – Operating expenditure
- PE – Private equity
- PI – Profitability index
- PIK – Payment in kind
- PIPE – Private investment in public equity
- PV – Present value
- RAROC – Risk-adjusted return on capital
- RCF – Revolving credit facility
- ROA – Return on assets
- ROCE – Return on capital employed
- ROE – Return on equity
- ROI – Return on investment