Glossary Terms

A process where a buyer inspects a potential transaction. Often includes a detailed review of accounting history and practices, operating practices, customer and supplier references, management references and market reviews.

A contractual provision stating that the seller of a business is to obtain additional future consideration based on the business achieving certain future business goals. An earn-out is a mutually beneficial tool to getting a deal done if it is structured appropriately. Is maximizes the selling price for the seller… earn-out/" rel="bookmark">Read More »Earn-Out

The gross operating revenues of the business less the expenses and other deductions applicable to the type of earnings you are defining: Net Income Earnings after the payment of all expenses including income taxes. See Net Earnings.

Earnings of a business prior to interest expense or income, and prior to corporate income taxes paid. This definition recognizes interest as a Cost of Capital, and not as an operating expense.

Earnings of a business prior to interest (expense or income), income taxes, depreciation and Amortization expenses.

See Adjusted EBITDA

Earnings of the business prior to income taxes paid.

Any benefit that can be quantified in terms of the money that it generates. Net income and revenues, for example, are forms of economic benefit. Profit and net cash flow are also economic benefits. An economic benefit may also refer to a reductions in costs, such as lower raw material… Read More »Economic Benefits

The period of time over which property may generate economic benefits.

Also known as an elevator speech. It is a short overview of a business, products, or services, and typically is used in business settings such as face-to-face networking. An elevator pitch is short and, as the name implies, delivered in the time it takes to complete a typical elevator ride.