What is Mosaic Theory? The mosaic theory is an approach to financial security analysis that involves the analysis of a variety of resources, including public and non-public material and non-material information, to determine the underlying value of a security. The theory provides a more comprehensive and meticulous approach to the valuation of financial securities because…
What is an Alternative Investment? An alternative investment is an investment in assets different from cash, stocks, and bonds. Alternative investments can be investments in tangible assets such as precious metals or wine. In addition, they can be investments in financial assets such as private equity, distressed securities, and hedge funds. Generally, alternative investments tend…
What is the Goodwill to Assets Ratio? The goodwill to assets ratio measures the amount of goodwill a company has recorded on its books compared to its total assets. Therefore, the goodwill/assets ratio is used to determine what portion of a company’s assets are classified as intangible assets versus its tangible assets. What is Goodwill? Goodwill is…
What is a Stock Exchange? A stock exchange is a marketplace where securities, such as stocks and bonds, are bought and sold. Bonds are typically traded Over-the-Counter (OTC), but some corporate bonds can be traded on stock exchanges. Stock exchanges allow companies to raise capital and investors to make informed decisions using real-time price information. Exchanges can…
What is Forced Sale Value? A forced sale value is the estimate of the amount that a business would receive if it sold off its assets one piece at a time during an unforeseen or uncontrollable event. The appraiser assumes that the business needs to sell its assets within a short duration at an immediate…
What are Corporate Finance Ratios? Corporate Finance Ratios are quantitative measures that are used to assess businesses. These ratios are used by financial analysts, equity research analysts, investors, and asset managers to evaluate the overall financial health of businesses, with the end goal of making better investment decisions. Corporate Finance Ratios are also heavily used…
What is Cash Management? Cash management, also known as treasury management, is the process that involves collecting and managing cash flows from the operating, investing, and financing activities of a company. In business, it is a key aspect of an organization’s financial stability. Cash management is important for both companies and individuals, as it is…
What is a Barrier Option? A barrier option is a type of derivative option contract, the payoff of which depends on the value of the underlying asset. In other words, the payoff only comes into effect if the asset underlying the barrier option’s reached or exceeded a predetermined price specified in the option contract. A…
What is a Targeted Auction? A targeted auction, also referred to as a controlled auction, is a type of auction that involves a small group of qualified buyers that compete for the acquisition of a company. The number of buyers is typically limited to about three (3) to ten (10), and only includes buyers that…
