Investment Banking Glossary: Key Terms and Definitions
- Covenant
- Dual-Track
- Enterprise Value
- Football Field
- Below-investment-grade
- Original Issue Discount (OID)
- Treasury Stock Method (TSM)
- Material Adverse Change (MAC) Clause
- Deferred Tax Asset (DTA)
- Valuation Allowance
- Levered Free Cash Flow
- Equity Risk Premium
- Accretion/Dilution Analysis
- Hostile Takeover
- Merger of Equals
- Comparable Companies
- Covenant-Lite
- Discounted Cash Flow (DCF)
- Deferred Tax Liability (DTL)
- Fully Diluted Shares Outstanding (FDSO)
- Noncontrolling Interest (NCI)
- Restricted Stock Unit (RSU)
- Preferred Stock
- Transaction Comps
- Enterprise Value to Revenue Multiple (EV/Revenue)
- Sum-of-the-Parts (SOTP)
- Perpetuity Growth Method
- No-Shop Provision
- Due Diligence
- Revolver
- High-Yield Bonds
- Accretion
- Capital Asset Pricing Model (CAPM)
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- Equity Value
- Fairness Opinion
- Last Twelve Months (LTM)
- Special Purpose Acquisition Company (SPAC)
- Net Operating Losses (NOLs)
- Unlevered Free Cash Flow
- Trading Comps
- Pro Forma
- Go-Shop Provision
- Term Loan A
- Interest Coverage Ratio
- Analysis at Various Prices (AVP)
- Confidential Information Memorandum (CIM)
- Dilution
- Exit Multiple
- Lock-Up
- Stapled Financing
- Synergies
- Weighted Average Cost of Capital (WACC)
- Greenshoe
- Cash Sweep
- Earn-Out
- Dividend Recap
- Breakup Fee
- Incurrence Covenant
- Rule 144A
- Follow-On Offering
- Cash Conversion Cycle
- Control Premium
- Free Cash Flow (FCF)
- Mid-Year Convention
- Net Share Settlement (NSS)
- Perpetuity Growth Method (PGM)
- Payment-in-Kind (PIK)
- Precedent Transactions
- Terminal Value
- Section 338(h)(10)
- Collar
- Tax Shield
- Payment-in-Kind (PIK) Toggle
- Poison Pill
- Debt/EBITDA
- Roadshow
- Quiet Period
- Bridge Loan
- Contribution Analysis
- Direct Listing
- Days Sales, Inventory, and Payables Outstanding (DSO/DIO/DPO)
- Net Operating Profit After Tax or Earnings Before Interest After Tax (NOPAT/EBIAT)
- Acquisition Premium
- Three-Statement Model
- Change in Net Working Capital
- Purchase Price Allocation (PPA)
- Asset Write-Up
- Step-Up in Tax Basis
- Maintenance Capex
- Section 382
- Levered Beta
- Tender Offer
- Term Loan B
- Bookbuilding
- Underwriter
- Net Debt
- Beta (β)
- Goodwill
- If-Converted
- Internal Rate of Return (IRR)
- Leveraged Buyout (LBO)
- Tax Receivable Agreement (TRA)
- Up-C
- Asset Sale vs. Stock Sale
- Deferred Revenue
- Enterprise Value to EBITDA Multiple (EV/EBITDA)
- Management Rollover
- Primary vs. Secondary Shares
- S-1 Registration Statement
- Equity Capital Markets (ECM)
- Asset-Based Lending (ABL)
- Bookrunner
- Mezzanine Debt
- Multiple on Invested Capital (MOIC)
- Return on Invested Capital (ROIC)
- Gross Spread
- Adjusted EBITDA
- Sources and Uses
- Exchange Ratio
- Multiple Expansion
- Sponsor Equity
- Investment Banking Valuation
- Cash Flow Statement
- Option Dilution
- Secondary Equity Offering
- Bond Issue Proceeds
- Valuation & Implied Share Price Mechanics
- Primary Equity Proceeds
- M&A & LBO Modeling Dynamics
- Purchase Price Premium
- Balance Sheet Equation
- Receivables Three Statement Link
- Accounting & 3 Statement Linking
- Restructuring (RX), DCM, & ECM
- Diluted Share Count