Transaction Services – FDD Quality of Earnings (QoE) Model

Description
Note: Free demo files with sample data are available on this channel. Click here to download the free demo file for this model: Corporate Finance - Quality of Earnings Model - DEMO - Eloquens

Purpose of the tool
This Excel-based Quality of Earnings (QoE) Model provides a structured framework to analyse the underlying earnings quality of a business by reconciling reported financials to adjusted and pro-forma results. It enables you to capture and classify reclassifications, normalising adjustments and pro-forma items in a transparent way and to link them back to the income statement via clear bridges and checks.

The model focuses on EBITDA and earnings-related KPIs, showing reported, adjusted and pro-forma EBITDA and margins, while clearly distinguishing between cash vs. non-cash items and recurring vs. non-recurring effects. It supports a consistent documentation of each adjustment with description, category and impact, making the logic easy to follow for internal and external stakeholders.

The tool is particularly useful for Transaction Services, buy-side and sell-side QoE reports, financial due diligence and factbook preparation, but can also be applied in internal performance reviews where normalised earnings and transparency on adjustments are key.

Each sheet includes a short “What to do / What to know” box with practical instructions, so you always know exactly what is expected on that tab and how it feeds into the overall model.

Key Outputs

• Reported, adjusted and pro-forma EBITDA and margins with clear bridge views
• Separate bridge components for reclassifications, normalising adjustments and pro-forma items
• Overview of cash vs. non-cash adjustments and recurring vs. non-recurring items
• Reconciliation checks between income statement, adjustment schedules and final QoE view
• Compact QoE overview suitable for direct inclusion in reports, factbooks and presentations

Key Inputs & Assumptions

• Income statement / trial balance data, ideally monthly and at account level
• Flags for QoE-relevant accounts and mapping to adjustment categories
• Line-by-line adjustment entries (description, classification, cash/non-cash, amount) in the QoE schedule
• Optional assumptions for grouping of adjustments or custom labelling of categories

How to use

1. Set the core parameters (time horizon, currency, basic options) in the Assumptions sheet.
2. Load the income statement / trial balance data into the IS_LEAD / source sheets and ensure full reconciliation.
3. Identify and enter reclassifications, normalising adjustments and pro-forma items in the QoE adjustment tab.
4. Review the EBITDA bridges, margin views and cash vs. non-cash overview as a basis for your QoE report or factbook.

Customization & support
The model is highly customisable – you can easily adapt categories, labels, grouping logic, KPIs and charts to your firm’s QoE style, sector specifics or reporting standards. For more complex customisations or individual requirements (e.g. firm-specific templates, integration into broader workbooks or additional analysis modules), feel free to reach out and we can discuss a tailored solution.

Each download includes both a fully blank “Clean Template” for working directly with your own data and a pre-populated Example Template that illustrates the model’s logic and calculations using realistic sample data.

If you want to cover the full analysis scope – from Earnings/QoE and Working Capital to Net Debt plus Sales and customer analytics – you may also want to have a look at the “Transaction Services All-in-One Financial Analysis Workbook.”

The screenshots provide a good first impression of the model, but they do not fully capture all functionalities and details—if you have any questions or would like to better understand specific features, feel free to reach out anytime.