Private Equity Fundamentals

Next video:
Loading the player...

Private equity refers to company ownership by a specialized investment firm. Typically, a private equity firm will establish a fund and use it to buy multiple businesses, with the goal of selling each one within a few years at a profit.

Private equity firms will often target an underperforming business and, after purchasing the company, use their management expertise to improve profitability.

Related Articles
  1. Fundamental Analysis

    The Return On Invested Capital (ROIC)

    Return on Invested Capital, or ROIC, is a fundamental method of determining a company's financial performance. It is used to measure how well a company is investing its capital. ROIC is calculated ...
  2. Investing Basics

    Types Of Shares: Authorized, Outstanding, Float And Restricted Shares

    A company’s financial statements may refer to multiple types of stock, including authorized, outstanding, float and restricted shares. If a company issues more shares, its outstanding shares ...
  3. Investing Basics

    Required Rate Of Return

    Learn more about this method used in inequity valuation and corporate finance.
  4. Credit & Loans

    Warning Signs Of A Troubled Company

    Learn about some important signals that indicate a company may be in serious trouble.
  5. Investing

    Understanding Risk And Time Horizon

    The interaction between your risks and your time horizon influences every investment decision you make, whether you know it or not. Learn the basics here.
  6. Home & Auto

    How To Calculate Return On Investment (ROI)

    Return on investment allows an investor to evaluate the performance of an investment and compare it to others in his or her portfolio. Find out how to calculate ROI and how to use to your advantage. ...
  7. Investing

    What Are Stocks?

    Stocks are one of the most popular financial instruments in the world, but what does a stock actually represent? Find out how and why stocks are created, and what buying a stock means for investors. ...
  8. Stock Analysis

    Why did Wal-Mart's Stock Take a Fall in 2015?

    Wal-Mart is the largest company in the world, with a sterling track-record of profits and dividends. So why has its stock fallen sharply in 2015?
  9. Investing News

    Should You Invest in Disney Stock Before Star Wars?

    The force is strong with Disney stock, as it continues to make gains going into the launch of EP7. But is this pricey stock a good buy at these levels?
  10. Investing News

    Silicon Valley Startups Fly into Space

    Space enthusiasts are in for an exciting time as Silicon Valley startups take on the lucrative but expensive final frontier.

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center