Glossary Terms

The value, as of a specified date, of future economic benefits and/or proceeds from sale, calculated using an appropriate discount rate.

A buyer will pay no more than that which he/she would have to to purchase an equally desirable substitute.

An investment in non-public securities. Also, an investment asset class typically reserved for large institutional investors, such as pension funds and endowments, as well as high net worth individuals. Includes investments in privately held companies, ranging from start-up companies to well established and profitable companies, to bankrupt or near bankrupt… Read More »Private Equity

An investment vehicle, typically a Limited Partnership, formed to make investments in private companies via a pool of available equity capital.

See Income Statement.

The quality of earnings refers to the proportion of income attributable to the core operating activities of a business. The amount of earnings attributable to higher sales or lower costs has higher quality, rather than artificial profits created by accounting anomalies such as inflation of inventory. Quality of earnings may… Read More »Quality of Earnings

An amount of income (loss) and/or change in value realized or anticipated on an investment, expressed as a percentage of that investment.

A ratio Analysis is a quantitative Analysis of information contained in a company’s financial statements used to evaluate various aspects of a company’s operating and financial performance such as its efficiency, liquidity, profitability and solvency.

A financing transaction that allows owners to harvest some of the value they have created in their company while retaining a large ownership stake in the business going forward. For example, recapitalization can involve exchanging one type of financing for another – debt for equity or equity for debt –… Read More »Recapitalization

A Business Broker who provides introductory information which leads to a Client relationship.