1 Flashcards
Equity ownership capitalization
the ratio of net worth to total assets
Net worth
the amount by which assets exceed liabilities
share issues
shares in a company made available for people to buy
Revaluation Reserve
a non-cash reserve created to reflect the true value of the asset when the market value of a certain category of asset is more or less than the value of such asset at which it is recorded in the books of account
Retained earnings
the cumulative net earnings or profits of a company after accounting for dividend payments
Net Profit
Total earnings after subtracting all expenses
Gross profit
Earnings after subtracting costs of producing and selling its products - or Cost of goods sold (COGS)
Tax Reserves
Amounts payable, accrued liabilities or other amounts owing in respect of Taxes attributable to the operations of any Company
Capitalization Table
also known as a cap table, is a spreadsheet or table that shows the equity ownership capitalization for a company.
Capital structure
how a company funds its overall operations and future growth
Equity
ownership rights in the company, without the need to pay back any investment
Debt
borrowed money that is due back to the lender, commonly with interest expense
debt to equity ratio
a ratio used to evaluate a company’s financial leverage. is calculated by dividing a company’s total liabilities by its shareholder equity
Valuation Multiple
summarizes in a single number the relationship between the market value of a company’s stock (or of its total capital) and some fundamental quantity, such as earnings, sales, or book value
Value proposition
an innovation, service, or feature intended to make a company or product attractive to customers
Non-dilutive funding
funding that does not require the recipient to give up equity in their company
ebitda
Earnings Before Interest, Taxes, Depreciation, and Amortization
Enterprise Value
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Leveraged Buyout (LBO)
when the acquisition of another company is completed almost entirely with borrowed funds.
GAAP
Generally accepted accounting principles. standardizes financial reporting and provides a uniform set of rules and formats to facilitate analysis by investors and creditors
Liquidity
the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price
Venture capitalist
a private equity investor that provides capital to companies with high growth potential in exchange for an equity stake.
Corporate Transaction
the occurrence of any “Person” becomes the “beneficial owner”, directly or indirectly, of securities of a Company representing more than fifty percent (50%) of the total voting power
Private equity
a type of alternative investment in which the investors purchase shares in privately-held businesses
