Business Finance Terms, Explained Simply.
Learn more about common financial terms here.
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A working capital adjustment is the mechanism in a transaction that ensures the buyer receives a business with a normal,....
A vendor take-back is a seller-financed loan where the selling owner lends a portion of the purchase price back to....
A strategic buyer acquires a business for what it adds to their existing operation; a financial buyer acquires it as....
Sell-side readiness is the state of being genuinely prepared to run a sale process, with the financial, legal, operational, and....
Representations and warranties are the seller’s formal statements in a purchase and sale agreement about the accuracy and completeness of....
The real number is what a business actually earns under normal operating conditions; the tax number is the lower figure....
Quality of earnings readiness is the state of being prepared for a buyer’s QoE review, with financial records, accounting policies,....
A Quality of Earnings report is an independent financial analysis that examines the reliability, sustainability, and accuracy of a business’s....
Purchase price allocation is the process of assigning the total transaction price across the specific assets and liabilities acquired, a....
A purchase and sale agreement is the definitive legal contract that governs a business transaction, setting out every binding term,....
Pre-sale due diligence is the process of reviewing a business before a buyer does, to identify and resolve the issues....
Normalized EBITDA is reported EBITDA adjusted to remove owner-specific costs, non-recurring items, and other distortions, producing the earnings figure that....