EBITDA the business can defend. Adjustments diligence can underwrite.
TEOL delivers sell-side and buy-side Quality of Earnings to the institutional standard buyers, lenders, and sponsors expect. Documented adjustments. Defensible normalizations. Working capital that holds. The earnings number the business carries into the event survives outside review.
QoE Lite from $4,950 · QoE Report from $7,500 · Fixed fee, scope in writing
Who this is for
TEOL Quality of Earnings is the institutional QoE work delivered inside transaction processes. The engagement documents and defends EBITDA adjustments, normalizes working capital, isolates one-time items, and produces the diligence-grade analysis buyers, lenders, and sponsors require. Sell-side and buy-side mandates are delivered to the same institutional standard.
Buyers under LOI
You need the earnings number tested before the exclusivity period runs out, while price and structure can still move.
Owners preparing to sell
You are six to eighteen months from a process and you want the number built and supported before buyers start taking it apart.
Borrowers and sponsors
A lender or a credit committee has asked for adjusted EBITDA with the support sitting behind every adjustment.
The pattern that brings businesses to TEOL.
Six conditions. One underlying need. The earnings number has to hold under diligence scrutiny.
A sale process is being prepared.
EBITDA must be defended before the buyer's diligence team examines it. Adjustments need to be documented in advance, not negotiated in real time.
A buy-side acquisition is under review.
The acquirer needs an independent, institutional view of the target's earnings, separate from the seller's representation and grounded in the business as it actually operates.
A refinancing or capital raise is approaching.
Lenders and capital providers underwrite to EBITDA. The earnings number must be defensible before the conversation begins, not after the term sheet is contested.
A sponsor transition is underway.
Incoming ownership requires a clear, institutional view of the earnings they are inheriting, including the adjustments that will define ongoing reporting expectations.
The internal EBITDA number has drifted from operating reality.
Owner add-backs have accumulated. One-time items have stayed in. Working capital has not been normalized. The reported EBITDA no longer reflects how the business actually operates.
Diligence has already begun and the response is not institutional.
The diligence process is underway, the data room is open, and the responses are not holding up. The QoE must be rebuilt mid-process, to standard, before the deal stalls.
What the work produces
A quality of earnings engagement exists to answer one question, which is what the business actually earns and whether that figure will survive somebody else testing it.
Reported EBITDA rarely answers that on its own, because the number sitting in the accounts carries whatever the owner happened to be taking, along with personal costs that have run through the business for years, rent paid to a related party at a figure nobody ever negotiated, and the start-up losses of a location that opened in the fourth month of the year sitting in the same line as the sites that have been trading for a decade. None of that is unusual and almost none of it is dishonest, but all of it has to be found, sized and supported before anyone can put a price on the business with any confidence.
What comes out of the engagement is a number, the support that sits beneath it, and the context that surrounds it. The number is adjusted EBITDA by period, with every adjustment calculated and placed in its proper category. The support is the document, the page and the amount behind each of those adjustments, indexed so that the other side can check the work. The context is revenue quality, customer concentration, working capital behavior and net debt, which matter because an earnings figure presented without those four things beside it tells a buyer very little about what they would be acquiring.
What the other side will test
The engagement is built around the questions that buyers' teams, lenders' credit committees and sponsors' diligence providers actually ask, which are consistent enough across deals to prepare for in advance.
- Every add-back is checked against its support, and the support has to say what the adjustment claims it says.
- Revenue gets split into recurring, contracted, project-based and one-time, and the trend in that split matters as much as the split itself.
- The effect of losing the largest customer gets quantified, alongside how long that customer has actually been there.
- Working capital is examined by month, because an annual figure hides whether the balance was managed around the period end.
- The databook has to tie to the audited or reviewed statements, and anywhere it does not tie, the difference has to be explained.
- Cash has to be shown to have arrived, which is why proof of cash runs against the bank statements.
- Net debt gets examined for everything that behaves like debt without being a loan, including leases, deferred revenue, accrued owner items and earnouts.
What changes when the number is tested first
From the seller's number to a number that holds.
Every adjustment tied to the document, page and amount behind it.
From an annual snapshot to a monthly view.
Working capital by month, with a peg range you can negotiate from.
From surprises at closing to findings in week one.
Anything material reaches you while price and structure can still move.
From a spreadsheet to a file the other side can work through.
Databook, report, source files and a walkthrough.
The earnings number is the foundation. Build it on something that holds.
Quality of Earnings is the document diligence pressure-tests first. The earnings analysis has to withstand diligence before the transaction begins.
QoE at TEOL is the institutional analysis required to enter or run a transaction. The work is documented, defensible, and diligence-grade.
Document
We document every adjustment to reported earnings with supporting evidence, methodology, and rationale. Owner add-backs, one-time items, accounting policy adjustments, related-party items, each documented to institutional standard.
Normalize
We normalize working capital, isolate non-operational items, and adjust for accounting treatments that obscure operating reality. The result is an EBITDA number that reflects how the business actually operates.
Defend
We build the QoE to be defended. Adjustments supported with source documentation. Methodology explained. Diligence questions anticipated. The earnings number is not just produced. It is staged to survive scrutiny.
The same institutional standard, applied to both sides of the transaction.
Sell-Side QoE
For businesses approaching a sale, recapitalization, or capital raise. TEOL builds the earnings narrative the seller carries into the process: adjustments documented in advance, working capital normalized, one-time items isolated, methodology defended. The earnings number the buyer's diligence team encounters is institutional, not optimistic.
Buy-Side QoE
For sponsors, acquirers, and capital providers evaluating an acquisition. TEOL pressure-tests the target's earnings, identifies undisclosed adjustments, examines working capital integrity, and stress-tests the EBITDA the seller is presenting. The output is a clear, institutional view of what the buyer is actually acquiring.
Fixed fees for quality of earnings
Each engagement builds on a defined scope, and the three columns are size bands measured by the enterprise value of the business.
QoE Lite
You receive the adjusted earnings number with the document behind every adjustment.
From $4,950
Request a fixed quoteQuality of Earnings Report
You receive fifty named schedules, proof of cash and reconciliation to the statements.
From $7,500
Request a fixed quoteBoth engagements, side by side
| Engagement | Under $2M EV | $2M to $10M EV | $10M to $50M EV |
|---|---|---|---|
| QoE LiteOne-off | $4,950 | $6,900 | $9,500 |
| Quality of Earnings ReportOne-off | $7,500 | $13,500 | $19,800 |
Businesses above $50M in enterprise value, and QoE delivered inside a Transaction Finance Build, are scoped individually and quoted in writing.
Fees last reviewed 15 October 2026.
Which one fits
QoE Lite fits a live transaction where the number has to stand up. The adjustments, the working capital, the net debt and the revenue analysis are all documented in writing, with the schedules sitting behind them.
The Quality of Earnings Report is for an institutional counterparty, a deal with a lender in it, or a business running several entities and locations that have to be shown separately as well as consolidated. It is the engagement that carries proof of cash, reconciliation to the audited statements, payroll reconciliation and the transaction-level general ledger database.
What each engagement includes
The same work goes deeper as the engagement gets larger.
| Work | QoE Lite | Quality of Earnings Report |
|---|---|---|
| Adjusted EBITDA build | Full | Full |
| Written report | Included | Included |
| Company, normalizing and pro-forma adjustments kept separate | Three categories | All three |
| Support indexed to document, page and amount | Included | Included |
| Revenue by customer, type and end market | Customer and type | All three plus location |
| Monthly working capital with a peg range | Included | Reported and adjusted separately |
| Net debt and debt-like items | Included | Included |
| Proof of cash against bank statements | Not included | Included |
| Reconciliation to audited or reviewed statements | Not included | Included |
| Payroll reconciliation to the ledger | Not included | Included |
| Consolidating views by entity and by location | Not included | Included |
| Fixed asset rollforward and lease detail | Not included | Included |
| Transaction-level general ledger database | Not included | Included |
| Walkthrough call with the deal team | Not included | Included |
| Named schedules in the delivered file | 21 | 50 |
The institutional QoE file the business carries into the event.
Six pillars. Each documented, supported, and structured to withstand outside review.
Documented EBITDA Adjustments
Every adjustment classified, sourced, and supported. Owner add-backs, one-time items, related-party adjustments, accounting policy normalizations, each documented to diligence standard.
Normalized Working Capital
Working capital examined, normalized, and benchmarked. Target working capital for the transaction defined and defended.
Quality of Revenue Analysis
Revenue concentration, recurring versus non-recurring, customer cohorts, and revenue recognition examined. The earnings number is anchored to revenue that holds.
One-Time and Non-Recurring Isolation
One-time items isolated, documented, and removed from ongoing earnings. The EBITDA the business carries into the event reflects steady-state operation.
Diligence-Grade Workpapers
The full workpaper file structured to institutional standard. Every adjustment traceable. Every methodology documented. The diligence team meets an organized response.
QoE Narrative & Defense
The earnings narrative built and held, written in a form that supports the seller's story or the buyer's evaluation and grounded in numbers that hold.
What you receive
Four things arrive at the end of the engagement, and the working files come with them as a matter of course.
The Excel databook
You get every schedule named and built out, running to fifty named tabs on the full databook, in a file a diligence team can work through without asking where anything came from.
The written report
The report covers the findings, the adjustments, revenue and earnings quality, working capital and net debt, with every exception quantified and the basis of preparation stated.
The source files
You keep the working files behind the analysis, so the work can be updated later by whoever needs to update it.
The walkthrough
We walk your deal team through the file on a live call, with the lender on it where there is one involved.
What happens after you request
- 01You send the request.You pick the engagement and the size band and send it through, with as much or as little context as you want to give at that point.
- 02You hear back with the scope and the fee.You receive an engagement letter setting out the work and the deliverables, along with the information request we would need to begin.
- 03The work starts when the records arrive.We move fast. The expected delivery date is confirmed in writing with your quote, and the clock starts once the information request comes back complete.
How a TEOL Quality of Earnings engagement unfolds.
Six stages. Each with a defined output. Together, the diligence-grade earnings file the business carries into the event.
Earnings Baseline & Scope
The engagement opens with a baseline review of reported earnings, the operating model, the accounting policies in place, and the transaction context. The scope of earnings adjustments is defined and the method for testing and documenting them is established.
Adjustment Identification
Every adjustment to reported EBITDA is identified, classified, and sourced. Owner add-backs, one-time items, related-party transactions, accounting policy adjustments, and working capital normalizations are each examined and documented.
Working Capital Normalization
Working capital is normalized to operating reality. Seasonality assessed. Build-up and reversal patterns examined. Target working capital for the transaction calculated and defended.
Documentation & Defensibility
Every adjustment is documented to institutional standard: source documentation, methodology, rationale, supporting analysis. The QoE file is structured to withstand the diligence team's review.
Diligence Q&A Preparation
The questions diligence will ask are anticipated and the responses prepared in advance. The QoE is not just produced. It is staged for the conversation that follows.
Through-Process Support
TEOL supports the leadership team through the diligence process itself. Responses held to standard. New questions absorbed. The earnings narrative carries through to close.
- The work follows the agreed scope, and any change is agreed before it starts.
- A mutual non-disclosure agreement goes in place before any information moves.
- The analysis stands on its evidence, independently of whether a deal closes.
Sectors we engage in.
TEOL QoE works with established operating businesses across almost every sector, including:
Industrial and building
manufacturing, industrials, construction and construction-adjacent services, building products, engineering services, aerospace and defense suppliers, chemicals, plastics and packaging
Ownership profiles include founder-led, family-held, search fund, independent sponsor, sponsor-backed, and platform-structured.
Frequently Asked Questions
Request your fixed quote
Tell us about the deal. We reply with the scope, fee and delivery date.
Start with the records that let the earnings figure be tested and supported.
What we need to start
To start we need the accounting records for the full period, which means the trial balances and general ledger detail, the monthly financial statements, audited or reviewed statements where they exist, the bank statements and the payroll registers. We also need the receivables and payables agings by month, revenue by customer by month, and contracts for the largest customers. Alongside those, send the lease schedule, the fixed asset register, the debt agreements, the tax returns, and the detail behind owner compensation and any related-party arrangements.
Step 1 of 2
Not ready for a quote yet? Start with the free QoE Pre-Read.
Read the earnings before the buyer does.
The earnings number has to hold. We build it so it does.
Initial conversations are private and substantive. Where there is a fit, we scope it clearly and move quickly. Where there is not, we say so directly.
Adjustments fall into three categories, and the file keeps them apart, because collapsing them together is the most common reason a seller's number gets discounted once diligence starts.
Company adjustments
These are the items management puts forward. Each one gets tested against the source support and then accepted, resized or rejected, with the reasoning written down beside it, because a proposed adjustment that has nothing behind it is worth nothing in a negotiation and it is far better to establish that before a buyer does it for you.
Normalizing adjustments
These are the adjustments we make ourselves to bring the period onto a comparable basis, which usually means moving owner compensation and related-party rent to market, isolating the legal and professional costs that came from something that has now finished, and pulling out one-time settlements and anything else that happened in the period and will not happen again.
Pro-forma adjustments
These are run-rate items, and they sit in their own category because buyers and lenders treat them differently from everything else. A price increase that landed in month ten, a site that opened in month four and a contract signed after the period closed all belong here, each one annualized with the basis shown, and all of them kept clearly apart from the normalized figure so that nobody has to guess which number they are looking at.
The engagement also produces an EBITDA bridge, so that reported, normalized and pro-forma earnings appear together in one view and the walk between them can be followed without opening another schedule.
The analysis covers eleven areas, and the depth of each one moves with the engagement you choose.
Company and financial background
We start by understanding how the business is actually run, which means the entity structure, the locations, how revenue is earned and billed and how the internal reporting is assembled, because everything after this depends on knowing where each number comes from.
Earnings quality and adjustments
We build adjusted EBITDA by period with company, normalizing and pro-forma adjustments kept in separate categories, each one calculated and tied to the document that supports it, and we walk reported earnings through to adjusted in a single bridge.
Proof of cash
We run recorded revenue and disbursements against the bank statements month by month, so that the earnings figure is supported by cash that genuinely arrived.
Revenue quality and customer concentration
Revenue gets split into recurring, contracted, project and one-time work, with revenue and margin by customer, retention and churn, and the effect on earnings of losing the largest accounts.
Cost structure and margin
We break out expense detail by category and separate run-rate costs from one-time items, so cost behavior and margin stability can be read across the whole period.
Working capital
We build working capital by month on a reported basis and an adjusted basis, isolate the seasonality and propose a peg range, because an annual figure hides whether the balance was being managed around the period end.
Net debt and debt-like items
We schedule the debt, the capital and operating leases, the deferred revenue, the accrued owner items and the earnouts, because these are what move the number between enterprise value and what the seller receives at close.
Assets, capital expenditure and leases
We roll forward the fixed assets with additions, disposals and depreciation by class, separate maintenance capital expenditure from growth, and schedule every lease with its terms, escalations and renewal dates.
Payroll and headcount
We reconcile the payroll registers to the general ledger and explain every difference, then isolate owner and related-party compensation and bring it to market where it needs to be.
Reconciliation to the statements
We tie the databook back to the audited or reviewed financial statements and name and explain each difference in the file.
Management inquiry and open items
We put our questions to management, record the answers and what we could corroborate, and hand over a list of what remains open at delivery, what would be needed to close each item and who is holding it.
This is every tab in the delivered file.
- Front matter:
- Control; Table of contents; Notice to readers; Notice to client; Scope and basis; Overview; Background and key findings; Appendix index
- Quality of earnings:
- QofE; QofE company adjustments; QofE normalizing adjustments; QofE pro-forma adjustments; QofE support adjustments draft; QofE other items; EBITDA bridge
- Profit and loss:
- Summary P&L consolidated; Summary P&L by location; Summary P&L by entity; P&L consolidating by location; P&L consolidating by entity; Operating margin by location; Revenue by type; Revenue by customer; Revenue by end market; Revenue by location; Expenses; Other income and expense; Payroll reconciliation; Reconciliation to audit
- Recast:
- Recast P&L on normalized EBITDA; Recast P&L on pro-forma EBITDA; Adjustment P&L normalized; Adjustment P&L pro-forma
- Cash:
- Proof of cash; Unrecorded cash flow
- Balance sheet:
- Summary balance sheet; Monthly working capital; Monthly reported working capital trend; Monthly adjusted working capital trend; Net debt and debt-like items; AR aging summary; AP aging summary; Accrued expenses; Fixed assets rollforward; Fixed assets summary; Start-up and shut-down costs
- Leases:
- Lease transaction detail
- Source:
- P&L source; Balance sheet source; GL detail database
- Delivered alongside:
- Written report; Management discussion log; Walkthrough call
TEOL Quality of Earnings operates against the same documented institutional standard as the broader engagement.
Financial Truth Ladder
The five-stage maturity model from reactive accounting to institutional reporting.
Reporting Under Scrutiny Model
The reporting structure that survives lender, board, sponsor, and buyer review.
Capital Readiness Scorecard
The seven dimensions that determine how a business is read against a capital event.
Institutional Readiness Framework
The six dimensions against which an institutional finance function is measured.
Observations from inside the earnings file.
The EBITDA quality discussion every founder underestimates until diligence.
Team TEOL · 10 minute read
Why most operators are twelve months from a capital event, but not twelve months ready.
Team TEOL · 8 minute read
The diligence trail that decides the outcome before the meeting begins.
Team TEOL · 9 minute read
TEOL Capital is not a broker-dealer, an investment adviser, a placement agent or a finder. Engagements are preparation and support work. TEOL does not place securities, solicit investors or make investor introductions, and takes no success, contingency or placement fee.
Standard terms
The fees published here are indicative, set against the scope described on each page, and a final quote is confirmed in writing before any engagement letter is issued. Nothing published here is an offer, and no engagement begins until a letter is signed by both sides. Work outside the stated scope is identified and quoted before it begins. Full payment or a 50% deposit on engagements under $10,000, and 50% at start with 50% at delivery above that. Expected turnaround is confirmed in writing with the quote. Fees are reviewed quarterly, and an engagement letter issued at a published fee holds that fee regardless of any later review. Management accounts, consolidations and financial statements we prepare are built from the records management maintains and remain management's responsibility. We do not guarantee any particular outcome, including a sale, a financing, a valuation conclusion or a price. Our liability on any engagement is limited to the fees paid for that engagement.