Quality of earnings reports get commissioned as a matter of routine in most deal processes, and they get read, mostly, for the headline adjustment number, the bridge from reported EBITDA to normalised EBITDA. 

What gets read far less carefully, and matters considerably more than most people give it credit for, is the detail underneath specific adjustments, because that detail is where the genuinely useful operational insight actually lives. 

A quality of earnings report that flags a one-time cost addback for a specific system migration, for instance, is telling you something more useful than just “add this back to EBITDA.” 

It’s telling you the business had a system that needed migrating, which is itself a signal about the state of the underlying infrastructure, and it’s worth asking what else in that infrastructure might need similar investment that hasn’t yet been flagged as a one-off cost because it hasn’t happened yet. Similarly, a revenue adjustment relating to a customer concentration issue is telling you something about customer diversification risk that’s worth understanding well beyond the specific number being adjusted. 

The habit worth building, whether you’re the one commissioning the QoE report or the one receiving it as an operating partner post-close, is reading past the headline bridge into the specific line-item commentary, and asking, for each significant adjustment, what it implies about the underlying business beyond the immediate number. 

The report itself usually contains more operational intelligence than the topline adjusted EBITDA figure suggests, and most of that intelligence goes unused because attention stops at the summary page.