Glossary

Business & Finance Glossary: Q

5 terms starting with Q, from a glossary of 638 definitions covering intangible assets, valuations, and key financial concepts.

Qualified Small Business Stock (QSBS)

A U.S. tax provision allowing investors in qualifying small businesses to exclude a portion of capital gains from federal taxation upon the sale of stock held for more than five years. QSBS incentives encourage early-stage venture investment and can significantly enhance after-tax returns for founders and investors in growth companies.

Quality of Earnings

A quality of earnings (QoE) review is an analysis of how sustainable and reliable a company's reported profits are, carried out during due diligence. Rather than re-auditing the accounts, it tests whether earnings reflect genuine, repeatable trading: it examines revenue recognition, customer concentration, the split between recurring and one-off income, the working-capital cycle, and every adjustment made to arrive at normalised EBITDA. A buyer commissions a QoE to confirm the earnings they are paying a multiple for are real; a seller increasingly commissions their own (a vendor QoE) before going to market, to defend the numbers and avoid surprises that reset the price mid-process. In the UK, QoE work is typically performed by a corporate finance or transaction services team. High earnings quality — diversified, contracted, cash-backed revenue — supports a higher multiple; low quality invites price chips, earn-outs and indemnities.

Quality of Earnings (QoE) Report

A detailed financial analysis, typically prepared by an accounting firm on behalf of a buyer or lender, that assesses the sustainability, accuracy, and adjustability of a target company's reported earnings. A QoE report examines revenue recognition policies, non-recurring items, related-party transactions, working capital normalisation, pro forma adjustments, and the bridge from reported EBITDA to adjusted EBITDA. It is a standard component of buy-side financial due diligence in M&A transactions.

Quality-Adjusted Output

A measure of output that accounts for changes in the quality of goods and services produced, rather than simply measuring volume. Quality adjustment is essential for accurate productivity measurement, particularly in sectors where intangible investments drive improvements in product functionality, reliability, and user experience.

Quantitative Easing (QE) and Asset Valuations

The monetary policy tool by which a central bank purchases financial assets to inject liquidity into the economy, typically lowering interest rates and inflating asset prices. QE periods tend to compress discount rates and elevate intangible asset valuations, making it critical for investors to understand the monetary environment when assessing enterprise value.