2026-05-28 · By Abhishek Bhandari · Zion Advisory Briefs

Light QoE vs Full QoE

Not every deal justifies a Big 4-grade Quality of Earnings report. The question is matching diligence depth to deal size, data maturity, and decision risk.

Full QoE

A full QoE is an independent, assurance-style analysis: detailed revenue recognition testing, cost allocations, add-back verification, NWC normalization, and extensive corroboration against ledgers and third-party evidence. It suits larger transactions, institutional lenders, and contested processes where the report itself becomes part of the financing package.

Light QoE

A light QoE focuses on the highest-risk areas for smaller deals:

Revenue recognition — is booked revenue real, complete, and correctly timed?
Cost allocations — do expenses land where management says they do?
Customer concentration — how exposed is EBITDA to the top few customers?
Add-back sanity check — which adjustments would survive buyer scrutiny?

Choosing depth

Factor	Light QoE	Full QoE
Typical deal size	Smaller / founder-led	Institutional scale
Output	Executive note + databook	Assurance-style report
Timeline driver	Days to weeks	Weeks, multi-party

We run light QoE as part of our FDD practice, typically alongside a databook build so the analysis sits on reconciled numbers.

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About this

The right scope is the one the deal warrants, not the one that maximises the fee. We will tell you which scope fits the transaction rather than defaulting to the larger one.

Frequently asked questions

What is a light QoE?

A focused review covering the core adjustments: owner remuneration, obvious non-recurring items, headline revenue quality and a working capital overview. It suits smaller deals where the analytical budget is limited and the buyer's own team will do the deeper work.

What is a full QoE?

A complete quality of earnings: contract-level revenue testing, detailed cost analysis, working capital seasonality, standalone cost modelling, and a full net debt and debt-like items review. It suits mid-market transactions where the buyer is relying on the pack rather than building their own.

How do you decide which scope to recommend?

We look at three things: the size of the transaction, the sophistication of the buyer's team, and the complexity of the target's accounting. If the buyer has a strong team and the target is straightforward, a light QoE is usually sufficient. If the buyer is relying on the pack and the target has related-party transactions or unusual cost structures, we recommend full scope.