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M&A Terms Every Business Owner Should Know

Class VI Partner

Common Equity Common Equity (sometimes also referred to as Common Stock) reflects the value of a company’s assets minus its liabilities minus any Preferred Equity that would have preference over the Common Equity. It is typically the highest risk/highest potential return portion of a company’s capital structure.

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M&A Valuation Methods: Your Essential Guide with 7 Key Methods

Valutico

These ratios, like the EBITDA multiple, compare a company’s financial performance (EBITDA, revenue, etc.) to its market value. These multiples are applied to target company’s latest financials such as revenue, earnings and book value of equity to arrive at an estimate of enterprise value or equity value.