What is the EV/2P Ratio? The EV/2P ratio is a ratio (also known as a multiple) that is particularly used to value oil and gas companies in the energy sector. It is calculated by dividing a company’s enterprise value (EV) by its proven and probable (2P) reserves. Analysts can understand how a company’s reserve resources…
What is a Holder of Record? Holder of Record is a term that defines an individual or entity that possesses the rights, benefits, and responsibilities associated with owning a financial security. While the term holder of record may be applied to ownership of any financial security – including bonds, futures, or derivatives contracts – the…
What is a Highly Leveraged Transaction (HLT)? A highly leveraged transaction (HLT) refers to a bank loan granted to a company already carrying an exceptionally large amount of debt. In the United States, the Office of the Comptroller of the Currency defines highly leveraged transactions very simply as bank loans to a company with a…
What is a Quick-Rinse Bankruptcy (Fast Bankruptcy)? A Quick-Rinse Bankruptcy (Fast Bankruptcy) is just what the name implies – a rapidly executed bankruptcy case. An individual may engage in a quick-rinse bankruptcy, but it is much more commonly a corporate bankruptcy proceeding. In the United States, quick-rinse deals are part of a Chapter 11 bankruptcy…
What is the Iranian Rial (IRR)? The Iranian Rial is the official legal currency of the Islamic Republic of Iran. It is subdivided into 100 dinars; however, dinar denominations of the Iranian currency are not typically used due to the extremely low value of one Iranian rial. Unlike most other currencies, there is no official…
What is the Harvard MBA Indicator? The Harvard MBA indicator is designed to help individuals evaluate investment market opportunities based on how many Harvard MBA students are working in what are deemed “market-sensitive fields.” The Harvard MBA indicator is a long-term, contrarian indicator. It provides a calculation of the total number of students graduating from…
What are High Earners, Not Rich Yet (HENRYs)? In the world of finance, HENRY is an acronym that stands for “high earners, not rich yet.” Although the phrase may appear mostly self-explanatory, there’s a bit more to it than meets the eye. The term was initially coined by Shawn Tully, who first used it in…
What is Equipment Finance? Equipment finance describes a loan or lease that is used to obtain business equipment. Business equipment may be any tangible asset other than real estate – examples include office furniture, computer equipment, machines used in manufacturing, medical equipment, and company vehicles. Understanding Equipment Finance Equipment finance is an important part of…
What is a Construction Loan? A construction loan is a loan granted for the purpose of building homes, offices, or other real estate properties. Construction loans are most commonly granted to builders or property developers to fund a major construction project such as a housing development, office building, or shopping center. However, they may also…
What is the GAAP Hierarchy? The GAAP hierarchy specifies the relative level of authority of accounting principles and guidelines under the Generally Accepted Accounting Principles that govern accounting standards in the United States. The hierarchy consists of four levels. The highest levels of the hierarchy provide broad, general rules for accounting, typically applicable to any…
