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GLOSSARY: ALPHABETICAL ORDER
the acronym for Capital Expenditures that are necessary within the next year.
companies have ownership capital that includes stock and paid-in surplus plus borrowed capital that includes bank debt and bonds. The combined forms of capital, ownership, and borrowed funds is a company’s capitalization.
the conversion of income into value as part of the valuation process by the application of a capitalization factor (any multiplier or divisor used to convert income to value).
the amount of money left over after cost of goods sold, general, selling, and administrative expenses but before interest, depreciation, taxes, and amortization.
property pledged by a borrower to protect the interests of the lender. Bank loans are often collateralized or secured by the company’s accounts receivable, inventory, or equipment.
the entrustment of proprietary information from one party to another for their exclusive use so as not to import the obtained knowledge to others.
dependent on or conditioned by something else. The price established for the business varies in relation to some future events.
future financial obligations are dependent on contractual events that take place.
a binding agreement between buyer and seller that restricts each party from taking certain actions particularly during the letter of intent period and closing.
a stream of potential business acquisitions moving across your desk in quantity that allows you to select the few that meet your criteria.
the amount that tangible assets decrease over the normal life cycle as designated by the parameters of SARS.
Discounted cash flow:
Discounted cash flow:
a valuation technique that assigns a value in today’s dollars to the cash flows that are expected to occur in the future.
the investigation of the other party’s business practices in an attempt to uncover previously unknown information.
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