Valuation Glossary

Redundant assets are assets that a company no longer needs or uses but still holds on its balance sheet. These assets tie up resources and capital that could be used for more productive purposes, and may incur ongoing costs such as maintenance or storage. Companies may choose to sell or dispose of redundant assets to free up resources and improve their financial performance. Identifying and addressing redundant assets is important for effective asset management and to reduce costs.

Recapitalisation is a financial strategy used by companies to restructure their capital composition, usually involving a significant change in their debt-to-equity ratio. This process can be initiated to stabilize a company’s balance sheet, reduce financial risk, improve cash flow, or to fend off hostile takeovers.

Rate of return (ROR) is a financial measure that calculates the percentage change in the value of an investment over a certain period of time. It shows the total gain or loss on an investment relative to the initial investment, expressed as a percentage. The calculation considers both capital gains/losses and income generated by the investment. ROR allows investors to evaluate the performance of their investments and compare returns of different investment opportunities. It is a crucial concept in finance and investing.

Similar to the current ratio but excludes inventory from current assets, as inventory is less liquid.

Pushdown accounting is a method used in financial reporting where the acquiring company pushes its new basis of accounting down to the acquired company's financial statements.