Private Equity Fundamentals
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.
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 as: (Net Income - Dividends) / Invested Capital
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 will increase. The outstanding shares comprise of float stock and restricted stock
Learn more about this method used in inequity valuation and corporate finance.
Learn about some important signals that indicate a company may be in serious trouble.
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.
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.
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