EV/Gross Profit Ratio
What is the EV/Gross Profit Ratio? The EV/Gross Profit Ratio is a profitability financial ratio that estimates the enterprise value of a company to its gross profit. It demonstrates how many dollars of enterprise value are generated for every dollar of gross profit earned. Generally, the lower the ratio, the lower is the company’s net...
Private Company
What is a Private Company? A private company is owned by either a small number of shareholders, company members, or a non-governmental organization, and it does not offer its stocks for sale to the general public. Instead, its stock is offered, owned, or exchanged privately among a small number of shareholders – or even held...
Professional Corporations
What are Professional Corporations? A professional corporation is a corporation that comprises different types of professionals such as doctors, lawyers, architects, accountants, engineers, psychologists, etc. In most states, professionals who want to incorporate their practice can do so by forming a professional corporation or a professional service corporation. A professional service corporation is different from...
Public Companies
What are Public Companies? Public companies are entities that trade their stocks on the public exchange market. Investors can become shareholders in a public company by purchasing shares of the company’s stock. The company is considered public since any interested investor can purchase shares of the company in the public exchange to become equity owners....
Residual Dividend Policy
What is a Residual Dividend Policy? A business with a residual dividend policy holds zero excess cash at any given point in time. All spare cash must be either reinvested in the business or redistributed among the shareholders. Imperfections in the capital market make it rare for a company to follow a pure residual dividend...
