Valuation Glossary

Consideration is a fundamental concept in contract law referring to something of value that is exchanged between parties to form a binding contract.

Common-size statements are financial reports that present information in a standardized format, making it easier to compare and analyze data. In these statements, each line item is shown as a percentage of a base amount, such as total assets or total sales. This allows for a better understanding of the proportions and trends within the financial statements. Common-size statements help in comparing companies of different sizes or industries, identifying areas of strength or weakness, and making informed decisions. They provide a standardized way to analyze financial information and spot patterns or changes over time.

Changes in operating working capital (OWC) refer to the variations in the short-term assets and liabilities used in a company's day-to-day operations. Operating working capital typically includes current assets such as accounts receivable, inventory, and current liabilities like accounts payable.

A change-in-control event refers to a significant shift in the ownership or management of a company that typically triggers specific provisions or clauses in contracts, agreements, or regulations.

Measures the ability to cover short-term obligations with cash and cash equivalents alone.