Australian Building Surveyors and Inspectors Key Glossary Terms
Acquisition
The process of one company purchasing another, either through buying shares or assets.
Acquisition Finance
Funding provided specifically to facilitate the purchase of another business.
Active Investment
An investment strategy where the investor takes an active role in the management or oversight of the company.
Advance Payment
Payment made ahead of the receipt of goods or services.
Aged Debtors Report
A summary showing how long invoices have been outstanding.
Alpha
A measure of an investment’s performance on a risk-adjusted basis.
Amalgamation
The combination of two or more companies into a new entity.
Amortisation
The gradual repayment of a loan over time through scheduled payments.
Anchor Investor
A major investor whose early commitment attracts others to participate in a funding round.
Angel Investor
An individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.
Anti-Dilution Provision
A clause that protects investors from dilution in future funding rounds.
Asset Allocation
The process of dividing investments among different asset categories to balance risk and reward.
Asset Deal
Acquisition of a company by purchasing its assets rather than its shares.
Asset Securitisation
The process of converting assets into marketable securities.
Asset-Backed Security (ABS)
A financial security backed by a pool of assets such as loans or receivables.
Assets Under Management (AUM)
The total market value of the investments that a person or entity manages on behalf of clients.
Authorised Deposit-taking Institution (ADI)
A financial institution authorised to accept deposits from the public.
Authorised Share Capital
The maximum amount of share capital that a company is authorised to issue.
Backward Integration
Acquiring a supplier to control the supply chain.
Balance Sheet
A financial statement showing a company’s assets, liabilities, and equity at a specific point in time.
Balloon Payment
A large final payment due at the end of a loan term.
Bank Reconciliation
The process of matching the balances in an entity’s accounting records to the corresponding information on a bank statement.
Basel III
A global regulatory framework on bank capital adequacy, stress testing, and market liquidity risk.
Benchmark Rate
A standard interest rate used as a reference for other rates.
Beta
A measure of a stock’s volatility in relation to the overall market.
Bill Discounting
A financial arrangement where a business sells its bills receivable to a bank at a discount to raise funds.
Bill of Lading
A legal document detailing goods shipped, used for ownership transfer and payment.
Bill of Materials (BOM)
A comprehensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product.
Black-Scholes Model
A mathematical model for pricing options.
Bolt-On Acquisition
Acquiring a smaller company to complement an existing business unit.
Book Value per Share
The value of a company’s assets divided by the number of outstanding shares.
Bootstrap Effect
The impact on financial metrics when a company with a high price/earnings ratio acquires a company with a low price/earnings ratio.
Break Fee
A fee paid if a deal does not go through, compensating the other party for their time and expense.
Break-Up Fee
A fee paid by a seller if they accept a competing offer after agreeing to a deal.
Bridge Loan
A short-term loan used until a person or company secures permanent financing or removes an existing obligation.
Budgetary Control
The process of comparing actual results with budgeted figures and taking corrective action.
Buy-Now-Pay-Later (BNPL)
Short-term financing allowing customers to defer payment for purchases.
CLO (Collateralised Loan Obligation)
A security backed by a pool of loans.
Callable Bond
A bond that can be redeemed by the issuer before its maturity date.
Capital Adequacy Ratio (CAR)
A measure of a bank’s available capital expressed as a percentage of its risk-weighted credit exposures.
Capital Call
A request by an investment fund for investors to provide additional funds as agreed.
Capital Expenditure (CapEx)
Funds used by a company to acquire or upgrade physical assets.
Capital Gain
The profit from the sale of an asset or investment.
Capital Injection
The infusion of funds into a company, often to support growth or address financial distress.
Capital Stack
The hierarchy of a company’s funding sources (e.g., senior debt, mezzanine financing, equity).
Capital Structure
The mix of debt and equity financing used by a company.
Cash Burn Rate
The rate at which a company uses cash to fund operations before generating positive cash flow.
Cash Conversion Cycle
The time it takes for a company to convert resource inputs into cash flows.
Cash Flow Forecast
Projection of future cash inflows and outflows to predict liquidity needs.
Cash Flow Statement
A financial statement showing cash inflows and outflows over a period.
Cash Flow Waterfall
The order in which cash flows are distributed to stakeholders in a structured finance transaction.
Cash Flow from Financing (CFF)
Cash generated or used in funding the business, including debt and equity transactions.
Cash Flow from Investing (CFI)
Cash generated or used in investment activities, such as buying or selling assets.
Cash Flow from Operations (CFO)
Cash generated by the core business activities.
Cash Management
The process of collecting, managing, and investing cash in a business.
Cash Reserve
Funds set aside to cover unexpected expenses or liquidity needs.
Cash Trap
A clause restricting cash distributions to shareholders if certain financial ratios are breached.
Catalysing
Using investment to seed new industries and diversify the economy.
Change of Control Clause
A provision that triggers certain actions if there is a change in the ownership of a company.
Channel Financing
Financing provided to supply chain partners such as distributors or retailers.
Chargeback
A demand by a credit card provider for a retailer to cover a disputed transaction.
Churn Rate
The percentage of customers who stop using a service over a period.
Clawback
A provision that allows an investor to reclaim money in certain circumstances.
Club Deal
A private equity acquisition where multiple firms jointly invest in a single transaction.
Collateralised Debt Obligation (CDO)
A complex structured finance product backed by a pool of loans and other assets.
Compliance
Adhering to laws, regulations, and internal policies.
Confidentiality Agreement
A contract restricting the sharing of sensitive information during negotiations.
Consignment Stock
Goods sent to an agent who pays the supplier only when the goods are sold.
Contingent Value Right (CVR)
A contractual right to receive additional payment if specific future events occur.
Contingent Workforce
Freelancers, contractors, or gig workers engaged for specific projects.
Convertible Note
A debt instrument that can be converted into equity at a later date.
Convertible Preference Shares
Preference shares that can be converted into ordinary shares under certain conditions.
Cornerstone Investor
A major investor who commits to investing in a fund or project, encouraging others to follow.
Cost of Capital
The required return necessary to make a capital budgeting project worthwhile.
Cost of Goods Sold (COGS)
The direct costs attributable to the production of goods sold by a company.
Covenant
A clause in a loan agreement that requires the borrower to do or refrain from doing certain things.
Covenant Breach
Failure to comply with the terms of a loan agreement.
Covenant Lite Loan
A loan with fewer restrictions on the borrower’s financial activities.
Cover Pool
Assets pledged to cover payments on covered bonds.
Cram-Down Round
A funding round where new investors override existing shareholders’ objections to terms.
Credit Control
The process of managing a company’s outstanding debts and ensuring timely collection.
Credit Default Swap (CDS)
A financial derivative allowing an investor to swap credit risk.
Credit Enhancement
Techniques to improve the credit profile of a structured financial product.
Credit Facility
An agreement allowing a borrower to draw down funds up to a specified limit.
Credit Linked Note (CLN)
A security with an embedded credit default swap, allowing the issuer to transfer credit risk.
Credit Rating
An assessment of the creditworthiness of a borrower.
Credit Tenant Lease (CTL) Financing
Securitisation of lease payments from creditworthy tenants.
Cross-Border M&A
Acquisition of a company in another country, involving complex tax and regulatory considerations.
Crowding In
Attracting private capital by acting as a lead or anchor investor.
Cycle Time
The time taken to complete one manufacturing cycle from start to finish.
Data Room
A secure place where confidential information is stored for due diligence.
Days Payable Outstanding (DPO)
The average number of days a company takes to pay its suppliers.
Days Sales Outstanding (DSO)
The average number of days it takes to collect payment after a sale.
Deal Flow
The rate at which investment opportunities are presented to investors.
Debenture
A type of debt instrument not secured by physical assets or collateral.
Debenture Trustee
An entity that oversees compliance with the terms of a debenture.
Debt Capital
Funds raised by borrowing, typically through loans or issuing bonds.
Debt Instrument
A contract that enables the issuer to raise funds by promising to repay the lender under agreed terms.
Debt Refinancing
Replacing an existing debt with a new one, usually to obtain better terms.
Debt Relief
Partial or total forgiveness of debt, or the slowing/stopping of debt growth.
Debt Restructuring
Modifying the terms of existing debt to improve liquidity or avoid default.
Debt Sculpting
Structuring debt repayments to align with projected cash flows.
Debt Service
The total amount required to cover interest and principal repayments on debt.
Debt Service Coverage Ratio (DSCR)
A measure of cash flow available to service debt obligations.
Debt-to-Equity Ratio
A measure of a company’s financial leverage, calculated by dividing total liabilities by shareholders’ equity.
Default
Failure to meet the legal obligations of a loan.
Deferred Tax Asset
An asset on a company’s balance sheet representing taxes paid or carried forward but not yet recognised in the income statement.
Dilution
The reduction in existing shareholders’ ownership percentage due to new shares being issued.
Direct Debit
An arrangement that allows a third party to withdraw funds from an account on agreed dates.
Direct Investment
Investment directly into a company or asset, as opposed to via a fund.
Disintermediation
The removal of intermediaries in the supply chain, often through direct funding or investment.
Distribution Agreement
A contract between a supplier and distributor outlining the terms of sale and distribution.
Dividend
A payment made by a corporation to its shareholders, usually as a distribution of profits.
Dividend Recapitalisation
Raising debt to pay shareholders a dividend without selling equity.
Double Bottom Line
Investment strategy that seeks both financial and social or economic returns.
Down Round
A funding round where a company’s valuation is lower than in previous rounds.
Drag-Along Right
Enables majority shareholders to force minority shareholders to join a sale.
Drag-Along Rights
A provision that allows majority shareholders to force minority shareholders to join in the sale of a company.
Drawdown
The act of accessing funds from a loan facility.
Drop Shipment
A supply chain management method where the retailer does not keep goods in stock but transfers customer orders to a manufacturer or wholesaler.
Dry Powder
Capital that has been committed to a fund but not yet invested.
Due Diligence
The process of investigating a business prior to acquisition.
Dynamic Discounting
Offering suppliers early payment in exchange for a discount, adjusted based on timing.
EBITDA Margin
EBITDA divided by total revenue, showing operational profitability.
EBITDA-C
Earnings before interest, taxes, depreciation, amortisation, and coronavirus-related adjustments (post-pandemic term).
EMIR (European Market Infrastructure Regulation)
EU rules for derivatives trading and reporting.
ESG (Environmental, Social, and Governance)
A set of standards for a company’s behaviour used by socially conscious investors.
Earnout
A payment mechanism in mergers and acquisitions where part of the purchase price is deferred and contingent on the target company achieving specific financial or operational milestones.
Efficient Frontier
A set of optimal portfolios offering the highest expected return for a defined level of risk.
Embedded Finance
Integrating financial services (e.g., payments, lending) into non-financial platforms.
Employee Share Option Plan (ESOP)
A programme that gives employees the right to buy shares in the company.
Enterprise Value (EV)
A measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalisation.
Equity Bridge Financing
Temporary funding provided to a company to cover the period between an acquisition or investment and an anticipated equity raise.
Equity Capital
Funds raised by issuing shares in the company.
Equity Financing
Raising capital by selling shares of ownership in the company.
Equity-Linked Note
A debt instrument with returns linked to the performance of an equity index or stock.
Evergreen Funding
A revolving credit facility with no fixed maturity date.
Exit Strategy
A plan for how an investor will realise a return, such as via sale, IPO, or secondary buyout.
FATCA (Foreign Account Tax Compliance Act)
US law requiring foreign institutions to report US account holders.
Factoring
The sale of accounts receivable to a third party (the factor) at a discount.
Fairness Opinion
An independent assessment of whether the terms of a transaction are fair.
Fallaway Covenant
A loan covenant that expires once predefined financial metrics are achieved.
Financial Adviser
A licensed professional providing financial advice and planning services.
Financial Product
A facility that helps save, invest, insure, or borrow money.
Financial Services Guide (FSG)
A document explaining the financial service offered, fees, and complaint handling.
Financialising
Deepening local financial markets through investment and development.
Fixed Interest Rate
An interest rate that remains constant for the duration of the loan or investment.
Float
The amount of money represented by cheques written but not yet cleared.
Floating Rate Note
A debt instrument with an interest rate that fluctuates with a benchmark rate.
Follow-On Investment
Additional investment in a company after the initial funding round.
Forward Integration
Acquiring a distributor or retailer to control the distribution chain.
Free Cash Flow Yield
Free cash flow per share divided by share price.
Fully Diluted Shares
The total number of shares that would be outstanding if all convertible securities were exercised.
Fund Manager
An individual or organisation responsible for investing funds on behalf of clients.
Fund of Funds
An investment vehicle that invests in a portfolio of other investment funds.
Funded Debt
Debt with a maturity exceeding one year, excluding short-term liabilities.
GMROI (Gross Margin Return on Investment)
A ratio assessing inventory profitability relative to investment.
GP (General Partner)
The manager of a private equity or venture capital fund, responsible for investment decisions.
Go-Shop Provision
Allows a seller to seek better offers for a specified period after signing an acquisition agreement.
Goodwill
An intangible asset arising when a company is purchased for more than the fair value of its net assets.
Greenshoe Option
An over-allotment option in an IPO to stabilise the share price.
Growth Capital
Funding provided to expand an existing business, often used for acquisitions or entering new markets.
Hedge
An investment made to reduce the risk of adverse price movements in an asset.
Holdco/Opco Structure
A parent company (Holdco) owning operating subsidiaries (Opcos) to isolate liabilities.
Hostile Takeover
Acquisition of a company against the wishes of its management.
Hurdle Rate
The minimum rate of return required by an investor before performance fees are paid.
Hybrid Bond
A bond with both debt and equity characteristics (e.g., convertible features).
IFRS 9
International accounting standard for financial instruments.
IRR (Internal Rate of Return)
A metric used to estimate the profitability of potential investments.
Impairment
A reduction in the value of an asset below its carrying amount.
Imputation Credit
A tax credit attached to dividends to avoid double taxation.
Initial Public Offering (IPO)
The first sale of shares to the public by a private company.
Innovation Funding
Capital allocated specifically for research, development, and product innovation.
Integration Planning
The process of planning how two companies will be combined post-merger.
Intercreditor Agreement
An agreement between two or more creditors outlining their respective rights and obligations.
Interest Coverage Ratio
A measure of a company's ability to meet its interest payments.
Interest Rate Swap
A derivative contract in which two parties exchange interest rate payments.
Interest-Only Loan
A loan where the borrower pays only the interest for a set period before principal repayments begin, often used to improve cash flow in the early stages of an investment.
Inventory Financing
Using inventory as collateral to secure a loan.
Inventory Turnover
A ratio showing how many times a company’s inventory is sold and replaced over a period.
J-Curve Effect
The tendency of private equity funds to show negative returns in early years and higher returns later.
Junior Debt
Debt that is subordinate to other debts in case of liquidation.
Just-in-Case (JIC)
Inventory strategy holding safety stock to mitigate supply chain disruptions.
Just-in-Time (JIT)
An inventory management strategy that aligns raw-material orders from suppliers directly with production schedules.
KPI (Key Performance Indicator)
A measurable value that demonstrates how effectively a company is achieving key business objectives.
KYC (Know Your Customer)
A process of verifying the identity of clients to prevent fraud and money laundering.
Lead Investor
The main investor in a funding round, often setting terms and attracting others.
Lean Manufacturing
A methodology minimising waste while maintaining productivity.
Letter of Intent (LOI)
A document outlining the preliminary understanding between parties before a formal agreement.
Leverage
The use of borrowed funds to increase the potential return of an investment.
Leveraged Buyout (LBO)
Acquisition using a significant amount of borrowed money.
Liability
An obligation arising from past transactions or events, the settlement of which may result in the transfer or use of assets.
Line of Credit
A flexible loan facility that allows a borrower to access funds up to a set limit as needed, typically used for short-term liquidity or working capital needs.
Liquidation Preference
The order in which investors are paid during a liquidation or exit.
Liquidity
The ability of a business to meet its short-term obligations as they fall due.
Liquidity Event
An event allowing investors to exit and realise returns (e.g., IPO, trade sale).
Liquidity Ratio
A measure of a company’s ability to meet its short-term obligations.
Loan Covenant
A clause in a loan agreement that requires a borrower to maintain certain financial metrics or refrain from specific actions. Can be positive (an obligation) or negative (a restriction).
Loan-to-Value Ratio (LVR)
The ratio of a loan to the value of the asset purchased.
Lock-Up Period
A period after investment during which investors cannot redeem or sell their shares.
Management Buy-In (MBI)
When external managers acquire a significant stake in a company and join its management.
Management Buy-Out (MBO)
When a company’s existing management acquires a significant stake in the company.
Margin
The difference between the cost of a product and its selling price.
Market Capitalisation
The total market value of a company’s outstanding shares.
Market Value
The current quoted price at which an asset or service can be bought or sold.
Master Trust Structure
A securitisation framework allowing multiple issuances from a single asset pool.
Material Adverse Change (MAC)
A clause allowing a buyer to withdraw from a deal if significant negative events occur.
Maturity Date
The date on which a loan or bond must be repaid.
Mezzanine Financing
A hybrid of debt and equity financing, typically used to fund expansion or acquisitions.
MiFID II (Markets in Financial Instruments Directive II)
EU legislation regulating firms providing services to clients linked to financial instruments.
Minority Interest
A shareholding in a company that is less than 50% and does not confer control.
Monoline Insurer
An insurance company that guarantees the timely repayment of bond principal and interest.
Monte Carlo Simulation
A mathematical technique that allows for the modelling of complex situations by simulating random variables.
Negative Working Capital
When current liabilities exceed current assets, common in retailers with fast inventory turnover.
Neobank
A digital-only bank without physical branches.
Net Asset Value (NAV)
The value of a fund’s assets minus its liabilities.
Net Debt/EBITDA
A leverage ratio comparing net debt to earnings.
Non-Compete Clause
A provision preventing the seller from starting a competing business.
Non-Voting Shares
Shares that do not carry voting rights at company meetings.
Opco/Holdco Structure
A parent company (Holdco) owning operating subsidiaries (Opcos) to isolate liabilities.
Open Banking
Sharing financial data via APIs to enable third-party financial services.
Open-to-Buy (OTB)
A budgeting system for retailers to plan inventory purchases.
Operating Lease
A lease where the lessor retains ownership of the asset and the lessee uses it for a period.
Ordinary Shares
Shares entitling the holder to dividends that vary in amount and may be missed, unlike preference shares.
Outstanding Shares
Shares that have been issued and are in the hands of shareholders.
Overdraft
A facility allowing a business to withdraw more money than is available in its account, up to an agreed limit.
Par Value
The face value of a bond or share.
Pari Passu
A legal term meaning “on equal footing”; used to describe equal rights or claims.
Patient Capital
Long-term investment that does not expect immediate returns.
Pay-to-Play Provision
Requires investors to participate in future rounds to retain preferential rights.
Payment Holiday
A temporary pause on loan repayments, often negotiated during financial distress.
Payment-in-Kind (PIK)
A type of financing where interest is paid in additional debt or equity rather than cash.
Planogram
A visual diagram showing where products should be placed in-store.
Point of Sale (POS)
The time and place where a retail transaction is completed.
Portfolio Company
A company in which a private equity or venture capital fund has invested.
Pre-Emptive Rights
The right of existing shareholders to buy new shares before they are offered to others.
Preference Shares
Shares with preferential rights to dividends or assets upon liquidation.
Preferred Return
A minimum return that must be paid to investors before profits are shared with fund managers.
Presales Threshold
The market where new securities are issued and sold for the first time.
Presales Threshold
The minimum percentage of a development's units that must be pre-sold before a lender will release construction funding, used to de-risk large-scale property loans.
Private Equity
Investment in private companies not listed on a public exchange.
Private Placement
The sale of securities to a small number of select investors rather than through a public offering.
Private Placement Memorandum (PPM)
A document provided to prospective investors in a private placement.
Pro Rata Rights
The right of existing investors to participate in future funding rounds to maintain their ownership percentage.
Project Finance
Long-term financing of infrastructure and industrial projects based on projected cash flows.
Provision
An amount set aside from profits to cover anticipated liabilities or losses.
Prudential Regulation
Regulation aimed at ensuring the safety and soundness of financial institutions.
Purchase Consideration
The total amount paid for an acquisition.
Purchase Order (PO)
A commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.
Purchase Price Allocation (PPA)
The process of allocating the purchase price of an acquired business among its assets and liabilities.
ROIC (Return on Invested Capital)
Measures how effectively a company uses capital to generate profits.
Recapitalisation
Restructuring a company’s debt and equity mix to optimise capital structure.
Receivables Turnover Ratio
A measure of how efficiently a company collects its debts.
Recurring Revenue Model
Income generated through repeat payments (e.g., subscriptions).
Redemption
The repayment of a bond or other fixed-income security at or before maturity.
Regulatory Sandbox
A controlled environment for testing fintech innovations under regulator supervision.
Reinforcing
Reorganising and professionalising state holdings to drive commercial returns.
Reverse Break-Up Fee
A fee paid by the buyer if the deal fails due to financing or regulatory issues.
Reverse Takeover
A private company acquires a public company to bypass the lengthy IPO process.
Revolving Credit Facility (RCF)
A flexible loan allowing repeated borrowing up to a limit, with repayments resetting availability.
Rights Issue
Offering existing shareholders the right to purchase additional shares at a discount.
Ring-Fencing
Legally separating a bank’s retail operations from riskier investment activities.
Risk Management
The identification, assessment, and prioritisation of financial risks.
Rolling Forecast
A continuously updated financial forecast that adds a new period as the most recent period is completed.
SKU (Stock Keeping Unit)
A unique identifier for each distinct product and service that can be purchased.
SKU Rationalisation
Analysing product lines to eliminate underperforming stock-keeping units.
SPAC (Special Purpose Acquisition Company)
A “blank cheque” shell company raising capital to acquire a private firm, taking it public.
SaaS (Software as a Service)
A licensing model delivering software via subscription.
Secondary Market
The market where previously issued securities are bought and sold.
Secondary Sale
The sale of existing shares by early investors or employees to new investors.
Secured Loan
A loan backed by collateral to reduce the lender’s risk.
Seed Capital
Initial funding used to start a business, often from founders or angel investors.
Series A/B/C Funding
Successive rounds of funding for start-ups, typically increasing in size and valuation.
Share Buyback
When a company repurchases its own shares from the marketplace.
Share Purchase Agreement (SPA)
A contract for the sale and purchase of shares in a company.
Share Swap
Using shares as payment in an acquisition.
Shareholder
An individual or institution that owns shares in a company.
Sharpe Ratio
A measure for calculating risk-adjusted return.
Shrinkage
Loss of inventory due to theft, damage, or administrative errors.
Silent Partner
An investor who does not participate in the day-to-day management.
Solvency
A company’s ability to meet its long-term debts and financial obligations.
Solvency II
EU regulatory framework for insurance companies’ capital adequacy.
Special Purpose Vehicle (SPV)
A separate legal entity created to isolate financial risk.
Stag Investor
An investor who applies for shares in a new issue with the intention of selling them soon after allotment.
Staple Financing
Pre-arranged debt offered by the seller to potential buyers during an M&A auction.
Step-Up Coupon
A bond interest rate that increases over time if not redeemed early.
Strategic Funding
Raising financial resources aligned with long-term business goals, often for expansion, innovation, or acquisitions.
Strategic Investment Fund (SIF)
A fund, often government-backed, investing for both financial and economic development objectives.
Structured Finance
Complex financial instruments offered to borrowers with unique and sophisticated needs.
Subordinated Debt
Debt that ranks below other loans with regard to claims on assets or earnings.
Supply Chain Finance
A set of technology-based business and financing processes that link the various parties in a transaction.
Supply Chain Financing (SCF)
A set of solutions to optimise cash flow by extending payment terms to buyers while providing early payment to suppliers.
Sweat Equity
Shares given to founders or employees in recognition of their work.
Sweeping
The automatic transfer of funds between accounts to optimise interest or minimise overdrafts.
Syndicated Loan
A loan provided by a group of lenders and administered by one or more lead arrangers.
Synergy
The expected financial benefit from combining two companies.
Synthetic Securitisation
Transferring credit risk using derivatives rather than selling assets.
Tag-Along Rights
A provision that allows minority shareholders to join in a sale by majority shareholders.
Term Loan B (TLB)
A syndicated loan marketed to institutional investors, with flexible terms.
Term Sheet
A non-binding agreement outlining the basic terms and conditions of an investment.
Toehold Investment
Acquiring a small stake in a target company before launching a full takeover bid.
Tokenisation
Converting assets into digital tokens on a blockchain.
Trade Credit
The credit extended to you by suppliers who let you buy now and pay later.
Trade Payable Turnover
A ratio measuring how quickly a company pays its suppliers.
Tranche
A portion or slice of a pooled collection of securities, each with different risk and return profiles.
Transaction Costs
Expenses incurred during the process of buying or selling a business.
Underwriting
The process by which an institution takes on financial risk for a fee, such as in securities issuance.
Unitranche Financing
A hybrid loan combining senior and subordinated debt into a single facility.
Unsecured Loan
A loan not backed by collateral.
Utilisation Rate
The percentage of a service provider’s capacity billed to clients.
Valuation Cap
A limit on the valuation at which convertible notes convert into equity.
Value at Risk (VaR)
A technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatilities.
Vendor Managed Inventory
An inventory management system where the supplier is responsible for maintaining the inventory levels at the buyer’s location.
Venture Capital
Funding provided to early-stage, high-potential growth companies in exchange for equity.
Venture Debt
Debt financing provided to early-stage companies, often alongside equity rounds.
Vertical Integration
Controlling multiple stages of the supply chain (e.g., manufacturing + retail).
Voting Rights
The right of a shareholder to vote on company matters.
Warehouse Facility
Short-term financing used to accumulate assets before securitisation.
White Knight
A friendly acquirer who rescues a target company from a hostile bid.
Working Capital
The capital available for day-to-day operations, calculated as current assets minus current liabilities.
Yield to Maturity (YTM)
The total return anticipated on a bond if held until it matures.
Z-Score
A metric predicting the likelihood of corporate bankruptcy.