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What is A/P Days? A/P Days counts the average number of days it takes for a company to fulfill an invoice from suppliers or vendors for orde ...

What is A/R Days? The A/R Days measures the approximate number of days in which a company needs to retrieve cash from customers that paid us ...

What is Ability to Pay Analysis? Ability-to-Pay Analysis (ATP) is a method used by private equity investors to guide pricing and determine t ...

What is the Absolute Priority Rule (APR)? The Absolute Priority Rule (APR) refers to the underlying principle dictating the order of claims ...

What is the Absorption Rate? The Absorption Rate is a measure of supply and demand in the commercial real estate market, most often segmente ...

What is the Accounting Equation? The Accounting Equation is a fundamental principle that states assets must equal the sum of liabilities and ...

Common Accounting Interview Questions In the following post, we’ve compiled a list of the most frequently asked accounting questions f ...

What is Accounting Rate of Return? The Accounting Rate of Return (ARR) is the average net income earned on an investment (e.g. a fixed asset ...

What is Accounts Payable? Accounts Payable is a current liability recognized on the balance sheet to measure the unpaid bills owed to suppli ...

What is Accounts Payable Turnover? The Accounts Payable Turnover is a working capital ratio used to measure how often a company repays credi ...

What is Accounts Receivable? Accounts Receivable (A/R) is defined as payments owed to a company by its customers for products and/or service ...

What is Accounts Receivable Turnover? The Accounts Receivable Turnover is a working capital ratio used to estimate the number of times per y ...

An important part of investment banking is understanding mergers and acquisitions (M&A). Within M&A, One of the core models investment banking analysts and associates have to build when analyzing an acquisition is the accretion/dilution ...

What are Accruals? Accruals describe revenues earned and expenses incurred on the income statement, irrespective of whether cash was actuall ...

Accrual Accounting vs. Cash-Basis Accounting: What is the Difference? Under Accrual Accounting, revenue is recognized once earned, and expen ...

What is Accrued Expense vs. Accounts Payable? Accrued Expense and Accounts Payable each refer to unfulfilled 3rd party payments, but for acc ...

What are Accrued Expenses? Accrued Expenses refer to a company’s incurred expenses related to employee wages or utilities yet to be pa ...

What is Accrued Interest? Accrued Interest represents an unfulfilled interest expense amount still owed by a borrower to a lender as of a pa ...

What are Accrued Wages? Accrued Wages represent the unmet employee compensation remaining at the end of a reporting period, i.e. the balance ...

What is an Accumulated Deficit? The Accumulated Deficit line item arises when a company’s cumulative profits to date have become negative, w ...

What is Accumulated Depreciation? Accumulated Depreciation reflects the cumulative reduction in the carrying value of a fixed asset (PP& ...

What is Acid Test Ratio? The Acid Test Ratio, or “quick ratio”, is used to determine if the value of a company’s short-ter ...

What is Acquisition Financing? Acquisition Financing refers to the initial capital sources obtained to fund the purchase of a target busines ...

What is Activation Rate? The Activation Rate (%) represents the percentage of users that complete a specific action defined by a SaaS compan ...

What is Active vs. Passive Investing? Active vs Passive Investing is a long-standing debate within the investment community, with the centra ...

What is an Activist Investor? An Activist Investor seeks to be the catalyst of a turnaround of an underperforming publicly-traded company to ...

What is Activity Ratio? An Activity Ratio is a measure of operating efficiency, with regard to a company’s capacity to utilize its ass ...

What is an Add On Acquisition? An Add On Acquisition in private equity refers to the purchase of a smaller-sized target by an existing portf ...

What is Additional Paid-In Capital? Additional Paid-In Capital (APIC) represents the value received in excess of the par value from issuance ...

How to Adjust Column Width in Excel The following tutorial demonstrates the process of how to adjust the column width in Excel using keyboar ...

What is Adjusted EBITDA? Adjusted EBITDA is a non-GAAP measure of operating profitability determined by discretionary add-backs dictated by ...

What is Adjusted EBITDA Margin? The Adjusted EBITDA Margin measures the core operating profitability of a company on a normalized basis, i.e ...

What is AFFO? Adjusted Funds from Operations (AFFO) measures the financial performance of real estate investment trusts (REITs), particularl ...

What is Adjusted Net Income? Adjusted Net Income is a non-GAAP measure of a company’s net profitability, from which the effects of non-cash ...

What is Adjusted Present Value (APV)? The Adjusted Present Value (APV) is defined as the sum of the present value of a project assuming sole ...

Advanced LBO Modeling Test: Training Guide The following Advanced LBO Modeling Test training guide provides a step-by-step tutorial to compl ...

What is AFFO Yield? The AFFO Yield is the ratio between the AFFO per share of a REIT and its current market price, expressed as a percentage ...

What is After Tax Cash Flow? The After Tax Cash Flow is the residual income generated by a real estate property investment once tax obligati ...

What is After-Repair Value? The After-Repair Value (ARV) of a commercial rental property is the market value of the property upon completing ...

You have two options to choose from when using the Alignment Tool in PowerPoint: ‘Align Selected Objects’ and ‘Align to Slide’. If you don’t know how these options work (and affect the alignment of ...

What is Allowance for Doubtful Accounts? The Allowance for Doubtful Accounts is a contra-asset account that estimates the future losses incu ...

What is Alpha? Alpha (α) in finance is a measure of the excess return on an investment or portfolio above the benchmark return.

What are Alternative Investments? Alternative Investments are comprised of non-traditional asset classes, such as private equity, hedge fund ...

What is the Altman Z-Score? The Altman Z-Score, designed by NYU Professor Edward Altman, is a model used to predict the near-term likelihood ...

What is the Valuation of Amazon? Amazon (NASDAQ: AMZN) is an e-commerce company that offers online retail shopping and advertising services ...

What is Amortization of Intangible Assets? The Amortization of Intangible Assets is the accounting process whereby purchases of non-physical ...

What is Annual Contract Value (ACV)? The Annual Contract Value (ACV) refers to the annualized revenue per customer contract, excluding any o ...

What is Annual Income? Annual Income, or yearly income”, refers to the total earnings generated by an individual or corporation over a ...

What is APR? The Annual Percentage Rate (APR) is the interest rate charged by a lender on a yearly basis, expressed in the form of a percent ...

What is APY? The Annual Percentage Yield (APY) calculates the interest rate earned on a deposit or investment while incorporating the effect ...

What is Annual Recurring Revenue (ARR)? Annual Recurring Revenue (ARR) estimates the predictable revenue generated per year by a SaaS compan ...

What is the Annual Report? The two terms, Annual Report and Form 10-K, are often used interchangeably. However, the annual report is more ma ...

What is ARR Multiple in SaaS? The ARR Multiple is an industry-specific valuation ratio commonly used in the SaaS industry and for subscripti ...

What is ASC 606? ASC 606 is the revenue recognition standard established by the FASB and IASB that governs how revenue generated by public a ...

What is ABS? Asset Backed Securities (ABS) are financial instruments collateralized by an underlying set of liquid, financial assets pledged ...

What is the Asset Coverage Ratio? The Asset Coverage Ratio measures the number of times a company could hypothetically repay its debt obliga ...

When one company acquires another company, what does the seller actually give the buyer? The answer depends on whether the deal is structured legally as a stock sale or as an asset sale. Broadly ...

What is Asset Turnover Ratio? The Asset Turnover Ratio is a financial metric that measures the efficiency at which a company utilizes its as ...

What are Assets? Assets are resources with positive economic value that can either be sold for money if liquidated or be used to generate fu ...

What is Assets Under Management? Assets Under Management (AUM) refers to the market value of the capital contributed to a fund, from which a ...

What is Attrition Rate? The Attrition Rate measures the percentage at which a company’s employees churned over a predefined period (i. ...

What is the Average Annual Growth Rate (AAGR)? The Average Annual Growth Rate (AAGR) is calculated by taking the arithmetic mean of a series ...

What is the Average Collection Period? The Average Collection Period represents the number of days that a company needs to collect cash paym ...

What is Average Cost? The Average Cost, or “per unit cost”, is an economic term that describes the approximate cost incurred to manufacture ...

What is the Average Cost Method? The Average Cost Method assigns inventory costs using a weighted average approach, wherein the costs of pro ...

What is the Average Daily Rate? The Average Daily Rate (ADR) measures the average revenue generated per occupied room or rental unit, expres ...

What is Average Fixed Cost? The Average Fixed Cost (AFC) is the fixed costs incurred by a company that remain constant irrespective of outpu ...

What is Average Inventory Period? The Average Inventory Period is the approximate number of days it takes a company to cycle through its inv ...

What is AOV? Average Order Value (AOV) estimates the typical amount spent by a customer in each order, commonly placed on a website (i.e. e- ...

What is the Average Payment Period? The Average Payment Period represents the approximate number of days it takes a company to fulfill its u ...

What is Average Revenue Per Account (ARPA)? Average Revenue Per Account (ARPA) quantifies a SaaS or subscription-based company’s avera ...

What is ARPU? The Average Revenue Per User (ARPU) quantifies the amount of revenue generated on average from each customer. The implied ARPU ...

What is Average Selling Price? The Average Selling Price (ASP) is a financial metric that measures the approximate amount paid by a customer ...

What is Average Time on Page? The Average Time on Page measures the approximate time spent on a specific webpage by the visitors of a websit ...

What is Average Total Cost? The Average Total Cost (ATC) is the total cost per unit of output, inclusive of both fixed costs and variable co ...

What is Average Variable Cost? The Average Variable Cost (AVC) is the variable cost per unit incurred by a business across a given period. T ...

What is Backward Integration? Backward Integration is a strategy where a company gains more control over the functions in the earlier stages ...

What is Bad Debt? The Bad Debt Expense is a company’s outstanding receivables that were determined to be uncollectible and are thereby treat ...

What is Balance of Trade? The Balance of Trade is the value of a country’s exports (“outflows”) minus the value of its imports (“inflows”). ...

What is Balance Sheet? The Balance Sheet—or Statement of Financial Position—is a core financial statement that reports a snapshot of a compa ...

How to Forecast the Balance Sheet Our Balance Sheet Forecasting Guide provides step-by-step instructions on how to forecast the key line ite ...

In a finance and investment banking interview, candidates will almost certainly be asked questions that test their understanding of the relationship between the balance sheet income statement, and cash flow statement. The reason is ...

What is Bank Debt? Bank Debt is the most common form of corporate debt, which at the most basic level is conceptually the same as any other ...

What is the Efficiency Ratio? The Efficiency Ratio is a risk measure used to evaluate the cost-efficiency and profitability of a bank. The o ...

What is a Bank Run? A Bank Run occurs when customers start to collectively withdraw their funds from banks under the belief that the bank is ...

What are Barriers to Entry? Barriers to Entry deter new entrants from entering a market and protect the profits of existing incumbents. The ...

What is Basic EPS? The Basic EPS is a profitability ratio used to measure the residual net income allocatable to common shareholders on a pe ...

What is Basic Earnings Power Ratio? The Basic Earnings Power Ratio determines the efficiency at which a company utilizes its assets to produ ...

What is an LBO Model Test? The LBO Model Test refers to a common interview exercise given to prospective candidates during the private equit ...

How to Build an LBO Model LBO Modeling is a method to measure the implied returns on a leveraged buyout transaction (LBO), which is a specia ...

What are Basis Points? Basis Points (bps) represent a unit of measurement for interest rates in finance and are equal to 1/100th of 1.0%. Th ...

What is BCG Growth Share Matrix? The BCG Growth Share Matrix is a framework designed for companies to better understand a market’s cur ...

What is Before-Tax Cash Flow? The Before-Tax Cash Flow (BTCF) is the rental income generated by a property prior to the deduction of income ...

What is the Berry Ratio? The Berry Ratio is a profitability measure used to compare a company’s gross profit to its operating expenses, such ...

What is the Bessemer Efficiency Score? The Bessemer Efficiency Score is a measure of capital allocation and spending habits to determine the ...

What are the Best Finance Newsletters? Financial Newsletters are the preferred option for practitioners to stay on top of the markets and be ...

What is Beta in Finance? Beta (β) measures the sensitivity of a security or portfolio of securities to systematic risk (i.e. volatility) rel ...

What is the Bid-Ask Spread? The Bid-Ask Spread represents the difference between the quoted ask price and the quoted bid price of a security ...

What is a Black Swan Event? A Black Swan Event is a metaphor describing a rare, unexpected phenomenon with a low probability of occurrence y ...

Bloomberg vs. Capital IQ (CapIQ) vs. Factset vs. Refinitiv Bloomberg, Capital IQ (CapIQ), Factset and Refinitiv are the leading providers of ...

What is Blue Ocean Strategy? The Blue Ocean Strategy is oriented around creating a market and generating consumer demand for a new product o ...

BMC Software Recapitalization In our LBO Modeling courses, our students learn that private equity investors have 3 strategies that they can ...

Bank of America this morning announced that it will fire 2,000 investment bankers on top of the 30,000 announced last year in an attempt to regain profitability. This looked like another run-of-the-mill mega-bank layoff ...

What is Bond Yield? The Bond Yield is the rate of return expected to be received by a bondholder from the date of original issuance until ma ...

What are Bonds Payable? Bonds Payable are a form of debt financing issued by corporations, governments, and other entities in order to raise ...

What is Book Value of Equity? The Book Value of Equity (BVE) is the residual proceeds received by the common shareholders of a company if al ...

What is Book Value Per Share? The Book Value Per Share (BVPS) is the per-share value of equity on an accrual accounting basis that belongs t ...

What are Bookings vs. Billings? Bookings are a SaaS metric that represents the value of a customer contract with a contractual spending comm ...

What is Borrowing Base? The Borrowing Base is the limit placed by a lender on a financing arrangement based on the collateral pledged to sec ...

What is Bottom Up Forecasting? Bottom Up Forecasting consists of breaking a business apart into the underlying components that ultimately dr ...

*Updated for 2023: List of Boutique and Middle-Market Investment Banks* Miller Buckfire & Co. (Restructuring focused) Morgan Keegan & Co. WR Hambrecht & Co. Montgomery & Co.  (Media & Internet and Technology focused) Stephens, Inc. ...

What is Break-Even Point? The Break-Even Point (BEP) is the inflection point at which the revenue output of a company is equal to its total ...

What is Break-Even Analysis? Break-Even Analysis quantifies the total number of units that must be sold, or the minimum sales threshold, for ...

What is Breakeven Occupancy? The Breakeven Occupancy Ratio is the minimum occupancy rate threshold of a property to ensure its operating exp ...

A breakup fee refers to a payment a seller owes a buyer should a deal fall through due to reasons explicitly specified in the merger agreement. For example, when Microsoft acquired LinkedIn in June ...

What is Bridge Loan? A Bridge Loan is a source of short-term financing until the borrower secures long-term financing or removes an existing ...

The world is evolving rapidly, and these transformations have significant implications for every sector, including finance. In a recent webinar hosted by Wall Street Prep, panelists explored the impact of these changes, particularly in ...

What is Budget to Actual Variance Analysis? Budget to Actual Variance Analysis is among one of the key functions for a FP&A professional ...

Wall Street Prep put together this list of the top global bulge bracket investment banks. Learn more about these prestigious banks below. Bank of America Merrill Lynch Barclays Capital Citi Credit Suisse Deutsche Bank ...

What is a Bullet Loan? For a Bullet Loan, the entire principal of the debt obligation is repaid in a single, “lump sum” payment on the date ...

What is the Burn Multiple? The Burn Multiple measures the amount a startup is spending in order to generate each incremental dollar of annua ...

What is Burn Rate? The Burn Rate is the rate at which a company spends its cash, most often used to analyze the spending of early-stage star ...

You'll often hear finance professionals describe their role as being either on the “sell side” or on the “buy side.” As is the case with a lot of finance jargon, what this exactly means ...

What is Buyback Yield? The Buyback Yield is the ratio between the value of a company’s net stock repurchases and its market capitaliza ...

What is CAC Payback Period? The CAC Payback Period is the number of months needed by a company to recoup the initial costs incurred in the p ...

What is Calendarization? Calendarization is the adjustment of a company’s financial data and operating performance to align with the calenda ...

What is a Callable Bond? A Callable Bond contains an embedded call provision, in which the issuer can redeem a portion (or all) of the bonds ...

What is Cap Rate Compression? Cap Rate Compression occurs if the cap rates of properties in a particular real estate market decline relative ...

What is Cap Rate Expansion? Cap Rate Expansion refers to the scenario in which the capitalization rate of real estate assets such as propert ...

What is Cap Rate? Cap Rate—short for Capitalization Rate—is a measure of the expected rate of return on a real estate investment, such as a ...

What is Cap Rate Spread? The Cap Rate Spread is the delta between the 10-year Treasury note yield and cap rates in the broader real estate m ...

Cap Rate vs. Cash on Cash Return: What is the Difference? The Cap Rate and Cash-on-Cash Return are two common return metrics in commercial r ...

What are Cap Rates and Interest Rates? Cap Rates and Interest Rates in the commercial real estate (CRE) market are two highly correlated var ...

What is Capex to Cash Flow Ratio? The Capex to Cash Flow Ratio is the percentage of a company’s operating cash flow (OCF) allocated to ...

What is Capex vs. Opex? The distinction between Capex vs. Opex comes down to the intent behind the spending and the timing of the resulting ...

What is Capital Acquisition Ratio? The Capital Acquisition Ratio measures a company’s capacity to fund its capital expenditures (Capex ...

What is Capital Allocation? Capital Allocation is the process of strategically distributing resources to maximize profits and create positiv ...

What is CAPM? The Capital Asset Pricing Model (CAPM) estimates the expected return on an investment based on the perceived systematic risk. ...

What is Capital Gain? A Capital Gain occurs when the value of an investment – typically in equity (stocks) or debt instruments – rises above ...

What is Capital Gains Yield? The Capital Gains Yield measures the percent increase or decrease in the price of a security, namely a common s ...

What is the Capital Intensity Ratio? The Capital Intensity Ratio is a method to measure the reliance on asset purchases by a company to sust ...

What is a Capital Lease? A Capital Lease represents a long-term contractual agreement, where a company (i.e. the lessee) can rent a fixed as ...

What is Capital Stack? The Capital Stack is the structure of financing sources used to fund a real estate investment, such as a commercial p ...

What is Capital Structure? The Capital Structure is the mixture of debt, preferred stock, and common equity used by a company to fund its op ...

What is Capital Turnover? The Capital Turnover is a financial ratio that measures the efficiency at which a company can use its equity fundi ...

What is Capitalization Ratio? The Capitalization Ratio measures the proportion of a company’s operations funded by debt, most often to analy ...

What is Cap Table? The Cap Table is tracked by venture capital (VC) firms to provide a summary of the current capitalization (i.e. equity ow ...

When to Capitalize vs. Expense a Cost? The Capitalize vs Expense accounting treatment decision is determined by an item’s useful life ...

What are Capitalized Software Costs? Capitalized Software Costs are costs such as programmer compensation, software testing and other direct ...

What are Cash and Cash Equivalents? Cash and Cash Equivalents is a categorization on the balance sheet consisting of cash and current assets ...

What is Cash Available for Debt Service (CADS)? Cash Available for Debt Service (CADS) is arguably the most important metric in project fina ...

What is Cash Available for Distribution (CAD)? Cash Available for Distribution (CAD) quantifies the cash on hand that a real estate investme ...

What is the Cash Collateral Motion in Chapter 11? Cash Collateral is defined as cash, cash equivalents like marketable securities, and the p ...

What is Cash Conversion Cycle? The Cash Conversion Cycle is an estimate of the approximate number of days it takes a company to convert its ...

What is Cash Conversion Ratio? The Cash Conversion Ratio (CCR) measures the efficiency at which a company is able to convert its net income ...

What is Cash Coverage Ratio? The Cash Coverage Ratio measures liquidity risk by comparing a company’s EBITDA to its cash interest expense. T ...

What is Cash EPS? The Cash EPS is a non-GAAP profitability ratio that compares a company’s operating cash flow (OCF) to its diluted we ...

What is the Cash Flow Adequacy Ratio? The Cash Flow Adequacy Ratio determines if the cash flows generated by a company are sufficient to pay ...

What is Cash Flow Coverage Ratio? The Cash Flow Coverage Ratio (CFCR) is a credit metric that compares a company’s operating cash flow (OCF) ...

What are Cash Flow Drivers? Cash Flow Drivers determine the sustainability and future growth trajectory of a company, as they are byproducts ...

What is Cash Flow from Financing Activities? Cash Flow from Financing Activities tracks the net change in cash related to raising capital (e ...

What is Cash Flow from Investing Activities? Cash Flow from Investing Activities accounts for purchases of long-term assets, namely capital ...

What is Cash Flow from Operating Activities? Cash Flow from Operating Activities represents the total amount of cash generated from operatin ...

What is the Cash Flow Per Share? The Cash Flow Per Share measures the operating cash flow (OCF) generated by a company that is attributable ...

What is Cash Flow Statement? The Cash Flow Statement (CFS) is a financial statement that reconciles net income based on the actual cash infl ...

What is Cash on Cash Return? The Cash on Cash Return compares a real estate investment property’s annual pre-tax cash flow to the init ...

What is the Cash Ratio? The Cash Ratio compares a company’s cash and cash equivalents to its current liabilities and short-term debt obligat ...

What is Cash Runway? The Cash Runway measures the implied amount of time that an early-stage startup can continue operating at a loss before ...

What is a Cash Sweep? The Cash Sweep refers to the optional prepayment of debt using excess free cash flows in advance of the originally sch ...

What is Cash Turnover Ratio? The Cash Turnover Ratio is an efficiency ratio that compares the net revenue and average cash and cash equivale ...

In acquisitions, buyers usually pay the seller with cold, hard cash. However, the buyer can also offer the seller acquirer stock as a form of consideration. According to Thomson Reuters, 33.3% of deals in the ...

What is Cash Free Debt Free? Cash Free Debt Free (CFDF) is a transaction structure where the buyer does not assume any debt on the seller ...

What is Center Across Selection in Excel? The Center Across Selection feature in Excel aligns text horizontally across multiple columns, wit ...

The Chief Executive Officer (CEO) is the key leader in financial institutions, setting vision and strategy, and driving success. For finance ...

What is a Certificate of Deposit? A Certificate of Deposit (CD) offers higher interest rates than traditional savings accounts in exchange f ...

What is Change in Net Working Capital? The Change in Net Working Capital (NWC) measures the net change in a company’s operating assets ...

Chapter 11 vs. Chapter 7 Bankruptcy: What is the Difference? If filing for bankruptcy protection has become necessary, Chapter 11 Bankruptcy ...

What is the CFA Designation? The Chartered Financial Analyst (CFA) designation is a globally recognized credential for investment and financ ...

What is the Excel CHOOSE Function? The CHOOSE Function in Excel returns the value of a cell based on a specified position and range.

What is Churn Rate? The Churn Rate measures the percentage of a SaaS company’s existing customers that opted to cancel their subscriptions ( ...

What is Click-Through Rate? The Click-Through Rate (CTR) measures the effectiveness of an ad by dividing the number of clicks on the ad (or ...

What is COGS Margin? The COGS Margin is the ratio between a company’s cost of goods sold and revenue, expressed in the form of a percentage.

COGS vs. Operating Expenses: What is the Difference? Cost of Goods Sold (COGS) are the direct costs incurred from selling products or servic ...

What is Collateral? Collateral is an item of value that borrowers can pledge to lenders to obtain a loan or a line of credit. Oftentimes, le ...

What is Collateralization? Collateralization describes the process in which a loan agreement is secured by a borrower from pledging an asset ...

What is Combined Loan to Value (CLTV)? The Combined Loan to Value (CLTV) is an underwriting ratio that measures risk by comparing the total ...

What is Command Economy? The Command Economy is an economic system in which the central government is in a position to control and dictate t ...

From 1932 until 1999 there was a law called The Glass-Steagall Act, which said that commercial banks can lend money, extend lines of credit, and open checking and savings accounts, while investment banks can underwrite ...

What is a CMBS Loan? Commercial Mortgage-Backed Securities (CMBS) are a structured finance product, whereby a collateralized loan is secured ...

What is Commercial Paper? Commercial Paper is a form of short-term, unsecured debt, most often issued by corporates and financial institutio ...

What is Commitment Fee? The Commitment Fee is a fee charged by lenders to borrowers on the unused portion (i.e. the undrawn portion) of a li ...

What is CMRR? CMRR—or Committed Monthly Recurring Revenue—is a SaaS company’s monthly recurring revenue (MRR) that takes into account new bo ...

What are Commodities? Commodities are basic goods used for both consumption and production but also for physical exchanges and trading deriv ...

What is Commoditization? Commoditization is the occurrence wherein a product with economic value, formerly distinguished by its unique attri ...

What is Common Area Maintenance? Common Area Maintenance (CAM) refers to the fees incurred by tenants on top of their base rent that are use ...

What are the Common DCF Mistakes? The DCF model relies significantly on forward-looking projections and discretionary assumptions, making it ...

Below is a simplified representation of a Project finance model structure. Each of these blocks (e.g. “Cons”) represents a different calculation module. The cast of characters here is Ops = Operations, D&T = Depreciation ...

What is Comparable Company Analysis? Comparable Company Analysis is a relative valuation method in which a company’s value is derived ...

What is Competitive Pricing? Competitive Pricing is a method by which companies set the prices of their goods and services relative to the m ...

What is CAGR? CAGR—or “Compound Annual Growth Rate”—is the annualized rate of growth in the value of an investment or financial ...

What is Compound Interest? Compound Interest is the incremental interest earned on the original principal (or deposit amount) and the accrue ...

What is CMGR? Compound Monthly Growth Rate (CMGR) is a metric used to measure the month-over-month growth rate of a value, with the implicit ...

What is a CIM? A Confidential Information Memorandum (CIM) is an M&A document prepared by a company in an effort to solicit indications ...

What is Conglomerate Merger? A Conglomerate Merger is the combination of two or more companies that each operate in distinct, seemingly unre ...

What is the Conservatism Principle? The Conservatism Principle states that gains should be recorded only if their occurrence is certain, but ...

What are Contingent Liabilities? Contingent Liabilities must be recorded if the contingency is deemed probable and the expected loss can be ...

What is Contra Account? A Contra Account carries a balance (i.e. debit or credit) that offsets the normal account, thereby reducing the pair ...

What is a Contra Liability? A Contra Liability carries a debit balance rather than a credit balance, which is the opposite of the normal bal ...

What is Contribution Margin? The Contribution Margin is the incremental profit earned on each unit of product sold, calculated by subtractin ...

What is Contribution Margin Ratio? The Contribution Margin Ratio is the product revenue remaining after deducting all variable costs, expres ...

What is Control Premium? The Control Premium is the differential between the offer price per share and the unaffected market share price of ...

What is Conversion Rate? The Conversion Rate refers to the number of conversions (e.g. orders placed, subscribers, trial sign-ups), expresse ...

What is the Conversion Ratio? The Conversion Ratio refers to the number of shares of common stock that a convertible security holder is enti ...

What are Convertible Bonds? Convertible Bonds are fixed-income issuances structured with a conversion option to exchange them for a certain ...

What is a Convertible Note? A Convertible Note is a form of short-term financing wherein the loan converts into equity rather than being rep ...

The corporate bank falls within the investment banking division of financial institutions that have a balance sheet (meaning they make their own loans). Next we turn to the corporate banks other core product: Term ...

What is Corporate Banking? Corporate Banking is a division of a bank responsible for putting together loans to corporations, financial insti ...

What are Corporate Bonds? Corporate Bonds are debt issuances by public and private companies to raise capital in exchange for periodic inter ...

What is Corporate Restructuring? Corporate Restructuring is the financial reorganization of a distressed business with a capital structure d ...

What is Corporate Takeover? A Corporate Takeover describes an acquisition of a company, in which the acquirer obtains a controlling stake in ...

What is Cost Approach? The Cost Approach is a real estate appraisal method that estimates a property’s valuation based on the cost to ...

What is Cost of Capital? The Cost of Capital is the minimum rate of return, or hurdle rate, required on a particular investment for the incr ...

What is Cost of Debt? The Cost of Debt is the minimum rate of return that debt holders require to take on the burden of providing debt finan ...

What is Cost of Equity? The Cost of Equity (ke) is the minimum threshold for the required rate of return for equity investors, which is a fu ...

What is the Cost of Goods Manufactured (COGM)? The Cost of Goods Manufactured (COGM) represents the total costs incurred in the process of c ...

What is Cost of Goods Sold? Cost of Goods Sold (COGS), otherwise known as the “cost of sales”, refers to the direct costs incurred by a comp ...

What is Cost of Preferred Stock? The Cost of Preferred Stock represents the rate of return required by preferred shareholders and is calcula ...

What is Cost Per Lead? The Cost Per Lead (CPL) is the dollar amount spent on ad and marketing campaigns to acquire a new lead, i.e. a potent ...

What is Cost Structure? The Cost Structure of a business model is defined as the composition of fixed costs and variable costs within the to ...

What is Cost Variance? The Cost Variance (CV) is a key performance indicator (KPI) in project management that measures the difference betwee ...

What is Cost-Based Pricing? Cost-Based Pricing is a business strategy whereby the selling price of a product is set based on the total produ ...

What is Cost-Benefit Analysis? Cost-Benefit Analysis refers to a capital budgeting ratio wherein the estimated costs and benefits of a proje ...

What is Cost-Plus Pricing Strategy? Cost-Plus Pricing is a pricing strategy wherein a business determines the selling price of its goods and ...

What is the Excel COUNTA Function? The COUNTA Function in Excel counts the number of cells that are not blank, such as those containing numb ...

What is the Excel COUNTIF Function? The COUNTIF Function in Excel counts the number of cells that meet a specified criteria, i.e. a conditio ...

What is the Excel COUNTIFS Function? The COUNTIFS Function in Excel counts the total number of cells that meets multiple, rather than one, c ...

What is Country Risk Premium? The Country Risk Premium (CRP) is the incremental return an investor expects to earn from investing in a forei ...

What is Coupon Rate? The Coupon Rate is multiplied by the par value of a bond to determine the annual coupon payment owed by the issuer to a ...

What are Covenant-Lite Loans? Covenant-Lite Loans, or “cov-lite” for short, are debt financing arrangements in which there are fewer restric ...

What is Credit Analysis? Credit Analysis is the process of evaluating the creditworthiness of a borrower using financial ratios and fundamen ...

What is a Credit Rating? Credit Ratings are scoring reports published by independent credit agencies (e.g. S&P Global, Moody’s, Fitch) o ...

What is Credit Sales? Credit Sales refer to the revenue earned by a company from its products or services, where the customer paid using cre ...

What is Credit Spread? The Credit Spread is the difference between the yield to maturity (YTM) on a corporate bond issuance and a benchmark ...

What is Creditor Claims Trading? Creditor Claims Trading is the purchase and sale of valid claims on debtors by creditors hesitant to partic ...

What is the Role of Creditor Committees in Chapter 11 Bankruptcies? In Chapter 11 bankruptcies, Creditor Committees are formed to represent ...

What is the Critical Vendor Motion in Chapter 11? The Critical Vendor Motion grants post-petition debtors the ability to pay off prepetition ...

What is Cross-Sell Rate? The Cross-Sell Rate measures the proportion of a company’s revenue attributable to cross-selling strategies, expres ...

What is Cross-Selling? Cross-Selling is a strategy wherein a business strives to encourage existing customers to purchase adjacent products ...

What are Current Assets? The Current Assets categorization on the balance sheet represents assets that can be consumed, sold, or used within ...

What is Current Ratio? The Current Ratio is a measure of a company’s near-term liquidity position, or more specifically, the short-term obli ...

What is Current Yield? The Current Yield measures the expected annual return of a bond and is calculated by dividing the annual coupon by th ...

What is Customer Acquisition Cost? The Customer Acquisition Cost (CAC) is a SaaS metric that measures the amount spent on average by a busin ...

What is Customer Concentration? Customer Concentration refers to the risk attributable to a company’s revenue being too reliant on a small s ...

What is Customer Lifetime Value? Customer Lifetime Value (CLV) estimates the average profit a customer brings in for a company throughout th ...

What is CSAT? Customer Satisfaction Score (CSAT) is a rating method used to quantify the perceived satisfaction of a company’s existing cust ...

What are Cyclical Stocks? Cyclical Stocks are publicly traded securities characterized by share prices that fluctuate along with the prevail ...