Dominion Strategic Holdings LLC / Services
Institutional Services
Quality of Earnings Analysis
A quality of earnings analysis separates a company's recurring, sustainable earnings from the one-time items, owner add-backs and accounting choices that inflate a reported number. It is what a buyer relies on to decide whether the EBITDA in the seller's deck is real.
Why reported EBITDA is rarely the number you are buying
Sellers present earnings in their best light, and legitimately so. Add-backs for owner compensation, one-time legal costs, a discontinued product line, a related-party rent below market — each may be defensible on its own, and together they can move the number materially.
A QoE does not accuse anyone. It reconstructs earnings on a normalized basis so both sides are negotiating from the same figure.
What you receive
- Normalized EBITDA with every adjustment itemised and explained
- Recurring versus non-recurring revenue and cost analysis
- Related-party transaction review
- Working capital analysis and a normalised target
- Key risk summary written for a decision-maker
- A schedule you can hand to your lender or investment committee
Where the adjustments usually come from
Owner compensation and perquisites above or below a market salary for the role.
Related-party transactions — rent, management fees, purchases from an affiliated entity.
Non-recurring items that are being treated as recurring, or the reverse.
Revenue recognition timing and cut-off around period ends.
Working capital normalisation — what level the buyer actually needs to run the business.
Who this is for
- Buyers under LOI who need to validate the numbers
- Investors underwriting a platform or add-on acquisition
- Lenders financing a transaction
- Sellers who want to find the issues before a buyer does
Turnaround. Quality of earnings reviews are typically delivered in 10 to 15 days.
Fees are quoted per engagement and are not published. Inquire and you will receive a written proposal with a fixed fee, a fixed scope and a delivery date, at no charge.
This is analytical and modeling support for a transaction. It does not constitute deal brokerage, regulated financial advisory, an audit, or securities placement.
Frequently asked questions
- What is a quality of earnings report?
- An analysis that reconstructs a company's earnings on a normalized, recurring basis by identifying one-time items, owner add-backs, related-party transactions and accounting choices that distort the reported figure.
- Is a quality of earnings the same as an audit?
- No. An audit expresses an opinion on whether financial statements are fairly presented under an accounting framework. A QoE asks a different question: what are the sustainable earnings a buyer is actually acquiring.
- Who pays for a quality of earnings analysis?
- Usually the buyer, as part of diligence. Sellers increasingly commission one themselves before going to market, to find and address issues before a buyer uses them to reprice.
- How long does a QoE take?
- Ten to fifteen days for a full review. A faster pre-investment screen of five to ten pages can be delivered in two to three days if you first need to decide whether to proceed at all.
Related services
Request a proposal
Tell us what decision the analysis needs to support. You will receive a written proposal with a fixed fee, a fixed scope and a delivery date — prepared at no charge and with no obligation.
787-420-4655 · daniel.torrens@dominionstrategicholdings.com · San Juan, Puerto Rico