What is a Quality of Earnings Report — And How Otterz Makes it Simple and Clear

Avoid Surprises. Get the Real Financial Story.

If you’re buying, selling, or investing in a business, you already know how important it is to understand the company’s financial health. But the truth is, traditional financial statements don’t always give you the full picture. That’s where a Quality of Earnings (QoE) report becomes essential. And at Otterz, we make that process not only accurate but clear, thoughtful, and easy to understand.

What Exactly Is a Quality of Earnings Report?

A Quality of Earnings report is like looking under the hood before you buy the car; it helps you assess what’s really driving a business’s profits, not just what’s presented on the surface.

Unlike standard profit and loss statements, a QoE report digs deeper. It highlights what's recurring and reliable versus what’s unusual or temporary. This gives you a more realistic view of future performance and risk.

Here’s what a typical QoE report from Otterz focuses on:

• One-time expenses or gains that won’t repeat
• Owner-related or personal expenses included in business costs
• Revenue recognition practices, are they accurate and consistent?
• Cash flow health and working capital efficiency
• Accounting policies that might overstate or understate profits
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By sorting through these details, a QoE report helps uncover the true earnings potential of a company, not just what the books say on the surface.

Why Does Quality of Earnings Matter?

Let’s say you’re considering buying a company. The numbers look solid on the income statement, but what if some of that revenue is from a one-off project? Or what if expenses were artificially lowered due to unpaid vendor bills?

A QoE report helps you:

• Avoid financial surprises after closing a deal
• Understand the true earnings power of a business
• Spot red flags before they become problems
• Negotiate from a position of knowledge and strength
• Make confident, informed business decisions
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Whether you’re an investor, lender, or entrepreneur, this kind of insight is a must-have.

How Otterz Does Quality of Earnings Reports Differently?

At Otterz, we believe that financial clarity builds trust. We don’t just compile numbers, we connect the dots, provide context, and deliver insights that empower your next step.

Here’s how we stand out:

1. We Tailor Our Work to Your Business

We don’t believe in cookie-cutter reports. We start by understanding your industry, your business model, and your goals. From SaaS companies to retail stores, every business is different and our reports reflect that.

2. We Go Beyond the Basics

Otterz dives deep. We don’t stop at the income statement, we examine the story behind your revenue, expenses, assets, liabilities, and cash flow. We highlight recurring earnings and strip out the noise so you see what’s real and reliable.

We look into:

• Normalized EBITDA adjustments
• Seasonality or irregular revenue
• Working capital requirements
• Unusual transactions or accounting treatments
• Debt-like obligations hidden in the balance sheet

3. We Use Smart, Efficient Tools — Including Nyra, Our AI Accountant

What sets us apart even further is Nyra, our in-house AI-powered accountant. Nyra helps us analyze and organize large volumes of financial data in record time, allowing our team to focus on insights rather than spreadsheets.

Thanks to Nyra, we can deliver a comprehensive, accurate Quality of Earnings report in under 24 hours, without compromising on detail or depth. This means faster turnaround times for clients without sacrificing quality or care.

4. We Give You a Report That’s Actually Useful

No fluff, no filler. Our QoE reports come with a well-structured executive summary, red-flag sections, and practical insights you can act on. And if anything needs more clarification, we’re always available to walk you through it.

5. We Prioritize Your Trust

At Otterz, privacy and professionalism come first. We treat your financial data with the utmost care and follow the highest ethical standards. You can count on us to keep your information safe and confidential throughout the process.

When Should You Get a Quality of Earnings Report?

A QoE report isn’t just for big acquisitions. It can add value in several situations:

• Before buying or selling a business
• While raising capital or seeking new investors
• To support a merger or acquisition strategy
• During internal financial reviews or audits
• When preparing for a strategic exit or succession planning
  
  

Even if you’re not in a deal process today, a QoE report can help you clean up your books, understand your profitability drivers, and plan more effectively for the future.

Let’s Make Your Financial Picture Clear

A well-prepared Quality of Earnings report can protect you from major risks, reveal valuable opportunities, and help you move forward with clarity and confidence.

Whether you’re getting ready for a deal or just want to understand your numbers better, Otterz is here to help.

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