Explore key profitability ratios—learn how to assess a company's ability to generate income relative to revenue, assets, and equity for financial analysis.| Corporate Finance Institute
A leverage ratio indicates the level of debt incurred by a business entity against several other accounts in its balance sheet, income statement, or cash flow statement.| Corporate Finance Institute
A platform company refers to the initial acquisition made by a Private Equity Group in a specific industry or marketplace. The acquisition acts as the starting| Corporate Finance Institute
Debt capacity refers to the total amount of debt a business can incur and repay according to the terms of the debt agreement.| Corporate Finance Institute
Basis Points (BPS) are the commonly used metric to gauge changes in interest rates. A basis point is 1 hundredth of one percent.| Corporate Finance Institute
This guide shows you step-by-step how to build comparable company analysis ("Comps") and includes a free template and many examples.| Corporate Finance Institute
Return on Equity (ROE) is a measure of a company’s profitability that takes a company’s annual return (net income) divided by the value of its total shareholders' equity.| Corporate Finance Institute
Net Profit Margin is a financial ratio used to calculate the percentage of profit a company produces from its total revenue.| Corporate Finance Institute
Gross profit is the direct profit left over after deducting the cost of goods sold, or cost of sales, from sales revenue. It's used to calculate the gross profit margin.| Corporate Finance Institute
Earnings before tax, or pre-tax income, is the last subtotal found in the income statement before the net income line item. EBT is found| Corporate Finance Institute
How are the 3 financial statements linked together? We explain how to link the 3 financial statements together for financial modeling and| Corporate Finance Institute
SG&A includes all non-production expenses incurred by a company in any given period. It includes expenses such as rent, advertising, marketing| Corporate Finance Institute
Enterprise Value, or Firm Value, is the entire value of a firm equal to its equity value, plus net debt, plus any minority interest| Corporate Finance Institute
A three-statement model links the income statement, balance sheet, and cash flow statement into one dynamically connected financial model.| Corporate Finance Institute
EV/EBITDA is used in valuation to compare the value of similar businesses by evaluating their Enterprise Value (EV) to EBITDA multiple relative to an average.| Corporate Finance Institute
This is the ultimate Cash Flow Guide to understanding the differences between EBITDA, Cash Flow from Operations (CF), Free Cash Flow (FCF), Unlevered Free Cash Flow, and Free Cash Flow to Firm (FCFF).| Corporate Finance Institute
A DCF model is a specific type of financial model used to value a business. The model is simply a forecast of a company’s unlevered free cash flow| Corporate Finance Institute