Asset Sale: A transaction in which a buyer purchases specific assets of a business, rather than the entire company.

Balance Sheet: A financial statement that reports a company's assets, liabilities, and equity at a specific point in time.

Book Value: The value of a company's assets minus its liabilities, as recorded on its balance sheet.

Buyer Due Diligence: The process of investigation and verification conducted by a potential buyer to assess the risks and opportunities of a target business.

Capitalization (Cap) Rate: A rate used to estimate the value of a property or business by dividing its net operating income by the capitalization rate.

Cash Flow: The movement of money into and out of a business.

Confidentiality Agreement (NDA): A legal contract that prohibits the sharing of sensitive information.

Contingent Liability: A potential liability that may occur in the future, depending on the outcome of a specific event.

Corporate Culture: The shared values, beliefs, and behaviors of a company.

Debt Financing: Raising capital by borrowing money, which must be repaid with interest.

Due Diligence: The process of investigation and verification conducted before entering into a transaction.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): A measure of a company's profitability before accounting for interest, taxes, depreciation, and amortization.

Equity Financing: Raising capital by selling ownership shares in a company.

Financial Statements: Formal records of a company's financial activities, including the balance sheet, income statement, and cash flow statement.

Goodwill: An intangible asset representing the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.

Income Statement: A financial statement that reports a company's revenues, expenses, and profits over a specific period.

Letter of Intent (LOI): A non-binding document outlining the key terms of a proposed transaction.

Liquidation: The process of selling a company's assets and distributing the proceeds to creditors and shareholders.

Merger: The combination of two or more companies into a single entity.

Net Asset Value (NAV): The total value of a company's assets minus its liabilities.

Net Present Value (NPV): The present value of future cash flows, discounted to reflect the time value of money.

Non-Compete Agreement: A legal contract that prohibits a party from competing with another party for a specified period.

Operating Expenses: Costs incurred in the normal course of business operations.

Private Equity: Investment capital that is not publicly traded.

Profit and Loss Statement (P&L): Another term for the income statement.

Purchase Agreement: A legal contract that outlines the terms and conditions of a purchase.

Strategic Buyer: A buyer who acquires a business to achieve strategic goals, such as expanding market share or acquiring new technologies.

Synergy: The combined effect of two or more entities, resulting in a greater outcome than the sum of their individual effects.

Target Company: The company being acquired in a merger or acquisition.

Valuation: The process of determining the economic value of a business or asset.

Working Capital: The difference between a company's current assets and current liabilities.

Earnout: A portion of the purchase price that is contingent on the target company achieving specific performance targets after the acquisition.

Escrow: A neutral third party that holds funds or assets until specific conditions are met.

Seller Financing: When the seller of a business provides financing to the buyer.

Deal Breaker: A factor that, if discovered, would cause a potential buyer to abandon a deal.

Integration: The process of combining two or more businesses after a merger or acquisition.

Market Multiple: A valuation method that compares a company's value to a relevant financial metric, such as EBITDA or revenue, relative to similar companies in the market.

Enterprise Value: The total value of a company, including both equity and debt.

Return on Investment (ROI): A measure of the profitability of an investment.