The Library

Weighted Average Shares Outstanding

What is Weighted Average Shares Outstanding? Weighted Average Shares Outstanding (WASO) is a company’s average shares outstanding during a specific period, weighted by duration.

Weighted Average Cost of Capital (WACC)

What is Weighted Average Cost of Capital? Weighted Average Cost of Capital (WACC) is the average rate of return that different investors in a company require, weighted by how much they invested.

Valuation Multiples

What are Valuation Multiples? Valuation Multiples are ratios that you can use to determine how much a company or is worth. The main valuation multiples are EV/Sales, EV/EBITDA, and P/E.

Valuation Methods

What are Valuation Methods? Valuation Methods are ways to determine how much an asset is truly worth. There are 3 main valuation methods to determine how much a company or a stock is worth.

Unlevered Free Cash Flow

What is Unlevered Free Cash Flow? Unlevered Free Cash Flow (UFCF) is the cash flow a business generates that can be given to all investors. Both debt and equity investors.

Treasury Stock

What is Treasury Stock? Treasury Stock is stock that a company has repurchased from shareholders.

Terminal Value

What is Terminal Value? Terminal Value is the future value of a company at the end of our forecast period.

Terminal Multiple Method

What is Terminal Multiple Method? Terminal Multiple Method is a way to calculate Terminal Value assuming the business sells itself to a buyer.

Single-Step Income Statement

What is Single-Step Income Statement? Single-Step Income Statement is an Income Statement format that shows the calculation from Revenue to Net Income through a single step.

Shareholder’s Equity

What is Shareholder’s Equity? Shareholder’s Equity is the value of a company’s assets that belong to the shareholders after deducting all its liabilities. It’s also called “Book Value”.

Share Capital

What is Share Capital? Share Capital is the total sum of money investors have invested into the company through share issuances. Said differently, it’s the total amount of money a company raised from investors by issuing shares. It’s called “Share Capital” because it’s the capital…

SG&A

What is SG&A? SG&A stands for Selling, General & Administrative. SG&A is a major expense on the Income Statement reflecting cost of marketing its products and managing the company.

Risk-Free Rate

What is Risk-Free Rate? Risk-Free Rate is the rate of return on an investment with zero risk.

Revenue

What is Revenue? Revenue is the value of products a company sells to customers.

Retained-Earnings

What is Retained Earnings? Retained Earnings is the cumulative profit a company has earned that it hasn’t returned to shareholders through dividends yet. Said differently, it’s the cumulative amount of profit a company has retained within the company after paying dividends. Therefore, it’s called “Retained…

Restructuring Charge

What is Restructuring Charge? Restructuring Charge is expenses a company incurs to make significant changes to how it conducts business.