Insights Directory

Key concepts and terminology for financial advisors working with business owners

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A

Business Valuation

Aligning business goals with financial plans

The business performance needed to reach goal valuation

Business Valuation

Average historic EBITDA

A weighted average of historic EBITDA used to estimate business value

B

Business Valuation

Business Risk

Reflects the likelihood of a disruption to business operations or earnings in the future

C

Business Valuation

Current business valuation

An estimate of what all the equity in a client's business is worth

G

Business Valuation

Goal Valuation & Liquidity

The valuation a business needs to achieve to fund the owner's life goals.

I

Business Valuation

Income Approach to Valuation

Estimating business valuation based on future earning potential.

Business Valuation

Industry Selection & Valuation Multiples

Used to identify multiples when estimating valuation

Business Valuation

Interest-bearing Debt

Borrowed money that a company must repay with interest

M

Business Valuation

Market Approach to Valuation

Estimating business valuation based on comparable business benchmarks.

N

Business Valuation

Net working capital

A measure of how much short-term liquidity is available to run the business day-to-day

Business Valuation

Normalized EBITDA

EBITDA adjusted to remove unusual, non-recurring, or discretionary expenses to better estimate a business's value

R

Risk Management

Risk to equity owned

Risk to a client's equity value in the event of death, disability, or dispute

S

Succession & Exit

Succession & Exit Planning Guide

An overview of succession & exit planning for financial advisors

V

Business Valuation

Value of equity owned

An estimate of what the client's share of ownership in their business is worth