Archives: Resources

Sweat Equity

What is Sweat Equity? Sweat equity is a non-monetary contribution that the individuals or founders of a company make towards the company. Cash-strapped startups and business owners typically use sweat equity to fund their companies. For example, the founder of a tech startup company may value the efforts placed towards developing the company at $200,000….

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Option Pricing Models

What are Option Pricing Models? Option Pricing Models are mathematical models that use certain variables to calculate the theoretical value of an option. The theoretical value of an option is an estimate of what an option should be worth using all known inputs. In other words, option pricing models provide us a fair value of…

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Creating a Gantt Chart in Excel

What is a Gantt Chart? The Gantt Chart is a type of a bar chart used to depict the schedule of a project. The chart was developed at the beginning of the 20th century by Henry Gantt, an engineer and management consultant. The Gantt Chart is a powerful project management tool that illustrates the start…

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Use This Cover Letter Template to Get an Interview!

Cover Letter Template for a Job Application A cover letter can make or break a job application so it’s critical to get it right.  Whether your letter is being read by HR or the hiring manager directly, there are several important boxes you must tick.  This guide provides a free cover letter template and explanation…

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Dilutive Securities

How Do Dilutive Securities Impact Share Prices? Dilution can be caused due to a number of dilutive securities such as stock options, restricted and performance stock units, preferred stock, warrants, and convertible debt. Dilution may cause the share price to decline because it reduces the company’s earnings per share (EPS). The extent of the decline…

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Real Options

What are Real Options? Real options are a right but not an obligation to make a business decision. The concept of a real option is crucial to the success of a business as the ability to choose the right business opportunity bears a significant effect on the company’s profitability and growth. A real option allows…

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Tear Sheet

What is a Tear Sheet? In the world of finance, a tear sheet provides a one-page summary of the company with information such as Market Price, 52-week High and Low, Market Capitalization, Enterprise Value, Analyst Recommendation, Revenue, EBITDA, Valuation, Workforce Size, Share Price Movement, etc. Tear sheets are also known as “Fact Sheets” and help…

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Trading Multiples

What are Trading Multiples? Trading Multiples are a type of financial metrics used in the valuation of a company. When valuing a company, everyone relies on the most popular method of valuation, i.e. Discounted Cash Flow (DCF), but it becomes imperative for buyers and bankers to look how the market perceives a particular stock in…

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Transaction Multiples

What are Transaction Multiples? Transaction Multiples are a type of financial metrics used to value a company. In an M&A deal, the valuation of a particular company is done by various methods, including discounted cash flow and multiples. Among the different methods, Transaction Multiples play a very different role, as they make the buyer aware…

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Bullet Chart

What is a Bullet Chart? The Bullet Chart is one of the best secret weapons of a world-class financial analyst.  The Bullet chart can be used as an alternative to the gauge chart and is excellent for use in dashboards, as well as comparing actual results to forecasts.  It is one of the most effective…

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