Audit This
This financial statement shows a company’s revenue and expenses over a period of time
Income Statement
This term refers to the extra amount paid over a company’s market value in an acquisition
Premium
This stock skyrocketed during the 2020-2021 electric vehicle boom
Tesla
What is the full name for the total value of all goods and services produced in a country in a year
Gross Domestic Product
This valuation method adds up expected future cash flows and discounts them to a present value
Discounted cash flow (DCF)
Cash, inventory, and equipment are examples of this
Assets
This term describes the expected benefits from combining two companies
Synergies
This company is famous for a massive short squeeze in 2021 driven by retail investors on Reddit
GameStop
This is the interest rate banks charge each other for overnight loans
Federal funds rate
This acronym reflects the company’s cost of capital in a DCF
WACC
When a company receives cash before earning it, it is recorded as this type of liability
Unearned revenue
The process of reviewing a target company’s financials and operations before a deal.
Due diligence
This company experienced a name change after its 2022 acquisition by a notable CEO/founder
Twitter/X
This type of policy involves the central bank lowering interest rates to stimulate the economy
Expansionary monetary policy
This type of valuation method estimates a company’s value based on the price paid for similar companies in recent transactions
Precedent transaction analysis
This type of account includes rent, salaries, and utilities
Operating expenses
This term refers to a situation where a buyer takes over a company without the target’s approval
Hostile takeover
This e-commerce company faced heavy regulation in China over monopoly concerns
Alibaba
This economic situation is characterized by high inflation, high unemployment, and low economic growth
stagflation
This term refers to the estimated value of a company or project, assuming it grows at a stable rate forever
Terminal value
This accounting method records revenue when it is earned, not when cash is received
Accrual accounting
A company issues new shares to acquire another company. This is the likely effect on existing shareholders’ ownership.
Dilution
This EV company IPO’d in 2021 and became a high-profile electric truck manufacturer
Rivian automotive
This inflation indicator is preferred by the Fed for its more appropriate basket of goods.
PCE
Investors use this ratio to compare companies with different debt levels because it looks at earnings before interest and tax.
EV/EBITDA