Business Finance Terms, Explained Simply.

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What is Purchase Price Allocation?

Purchase price allocation is the process of assigning the total transaction price across the specific assets and liabilities acquired, a....

What is a Purchase and Sale Agreement (PSA)?

A purchase and sale agreement is the definitive legal contract that governs a business transaction, setting out every binding term,....

What is Pre-Sale Due Diligence?

Pre-sale due diligence is the process of reviewing a business before a buyer does, to identify and resolve the issues....

What is the Profit Gap?

The profit gap is the difference between what a business currently earns and what it would need to earn to....

What is Post-Exit Planning?

Post-exit planning is the preparation for life after the business, covering personal financial management, wealth deployment, identity, purpose, and legacy....

What is Phantom Equity?

Phantom equity is a compensation arrangement that gives key employees the economic benefit of ownership, a share of business value....

What is a Personal Financial Plan?

A personal financial plan is the comprehensive blueprint for how wealth, including business exit proceeds, will be invested, managed, and....

What is Profitability Improvement?

Profitability improvement is the deliberate process of increasing the percentage of revenue that converts to profit, through pricing discipline, cost....

What is the Personal Property Security Act (PPSA)?

The PPSA is provincial legislation that governs how security interests in personal property, equipment, receivables, and inventory are created, registered,....

What is a Personal Guarantee?

A personal guarantee is a commitment by a business owner to repay a corporate debt personally if the business cannot,....

What is a Prescribed Rate Loan?

A prescribed rate loan is a loan from a higher-income spouse or family member to a lower-income one at the....

What is a Personal Services Business?

A personal services business is a corporation the CRA treats as a disguised employment relationship, typically an incorporated contractor providing....