Our Glossary of Business and financial terms is designed to help you better understand the business process. Whether you're starting a business, buying or selling a business, financing a business or operating a business, you have to understand the terms that professionals frequently use. If there is a business term that you've heard that we haven't listed, please let us know, and we'll add it to the MergerPlace.com Glossary.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Other
Accounting records that show all the financial statement accounts of a business.
An attachment that gives the lender the right to seize the personal property of a borrower who has not fulfilled the obligations of the loan, but prevents the lender from seizing real property.
A type of obligation that covers all a borrower's mortgageable properties, not just one specific property.
Municipal securities secured by the issuer's pledge of its full faith, credit, and taxing power.
A participant who has unlimited liability for the obligations of a partnership.
An ownership entity in which two or more partners are involved and which results in unlimited liability for the partners.
GAAP encompasses the conventions, rules, and procedures necessary for the proper recording of a company's financial matters. The FASB is the body that determines what accounting procedures are generally accepted.
An aggressive takeover technique in that the proposed offer of the acquiring company is so large that management of the target company cannot refuse, out of fear of lawsuits or shareholder revolt.
When publicly owned stock in a firm is replaced with complete equity ownership by a private group. The firm is delisted on stock exchanges and can no longer be purchased in the open markets.
The initial sale of shares of a privately held corporation to the public.
The value of a company to another company or individual in terms of an operating business. The difference between a company's going-concern value and its asset or liquidation value is deemed goodwill and plays a major role in mergers and acquisitions.
A large payment to a senior employee who is forced into retirement or fired as a result of a takeover or simular development.
A bonus a securities firm pays to attract an employee from a competing firm.
A contract providing highly attractive termination payments to be made to current management in the event of a takeover of the company.
Federal funds that clear on the same day.
Is an intangible asset, often created in a transaction accounted for under the "Purchase Accounting" method, representing the amount by which the purchase price of a business exceeds the fair market value of the net assets acquired. Goodwill must be written off, giving rise to non-cash charges to income.
A type of long-term lease whose payments are variable rather than fixed, and depend upon a benchmark rate, such as changes in the consumer price index.
A type of stepped-payment loan in which the borrower's payments are initially lower than those on a comparable level-rate mortgage. The payments gradually increase over a predetermined period (usually 3, 5, or 7 years), and then are fixed at a level-pay schedule, which will be higher than the level-pay amortization of a level-pay mortgage originated at the same time. The difference between what the borrower actually pays and the amount required to fully amortize the mortgage is added to the unpaid principal balance.
A provision included in a new rule or regulation that exempts a business that is already conducting business in the area addressed by the regulation from penalty or restriction.
In a merger or acquisition, a gray knight is an acquiring company that outbids a white knight in pursuit of its own best interests, although it is friendlier than a hostile bidder.
The holding of a large block of stock of a target company by an unfriendly company, with the object of forcing the target company to repurchase the stock at a substantial premium to prevent a takeover.
The market value of goods and services produced over time including the income of foreign corporations and foreign residents working in the U.S., but excluding the income of U.S. residents and corporations overseas.
A person's total taxable income prior to adjustments. See: adjusted gross income.
The total value of a person's property and assets before accounting for debts, taxes, and liabilities.
-A person's total income prior to exclusions and deductions.
Interest earned before taxes are deducted.
A type of property lease in which the lessor (owner of the property being leased) pays expenses associated with ownership such as damages, taxes, and insurance.
Measures and economy's total income. It is equal to G.D.P. plus the income abroad accruing to domestic residents minus income generated in domestic market accruing to non-residents.
Sales minus the cost of goods sold.
Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold.
Total sales calculated by summing all sales at invoice values, neglecting any adjustments such as customer discounts or returns.
The fraction of the gross proceeds of an underwritten securities offering that is paid as compensation to the underwriters of the offering.
A lease of land, as opposed to a lease of a building.
Insurance coverage for a group, which can usually be obtained at a cheaper rate than insurance for an individual.
Mortgage with a fixed interest rate and payments that increase throughout the term of the mortgage.
A constant stream of cash flows without end that is expected to rise indefinitely.
Opportunity to invest in profitable projects.
A phase of development during which a company experiences rapid earnings growth as it produces new products and expands market share.
Compound annual growth rate for the number of full fiscal years shown. If there is a negative or zero value for the first or last year, the growth is not meaningful.
Common stock of a company that has an opportunity to invest money and earn more than the opportunity cost of capital.
The assumption of responsibility for payment of a debt or performance of some obligation if the liable party fails to perform to expectations.
A type of bond for which a firm other than the issuer guarantees its interest and principal payments.
A life and health insurance policy feature that enables the insured to add coverage at future times and at fixed and agreed-upon rates regardless of health conditions.
A contract promising a stated nominal interest rate over some specific time period, usually several years.
A policy that covers the full cost of replacing damaged property without any allowances or deductions, e.g., depreciation.
Close Window