The terms, in plain English.

A 13F is a quarterly SEC filing in which large institutional investment managers disclose their U.S. equity holdings, giving companies a window into who owns their stock.

The buy-side refers to institutions that invest money on behalf of clients, such as mutual funds, hedge funds, and pension funds, in contrast to the research-producing sell-side.

Consensus estimates are the average of analyst forecasts for a company’s key metrics, forming the expectations a company is measured against each quarter.

An earnings call is the scheduled conference call where a public company discusses its quarterly or annual results with analysts and investors, including a question and answer session.

An earnings surprise is the difference between a company’s reported results and consensus estimates, with beats and misses often driving sharp share-price moves.

An equity story is the concise, evidence-backed narrative a company tells investors about why it is a compelling investment, tying strategy, market, and numbers together.

Forward guidance is the forward-looking expectations a company shares with investors, typically revenue, earnings, or other key metrics for upcoming periods.

Institutional ownership is the share of a company held by large investors like funds and asset managers, a key signal of confidence and stability in the shareholder base.

An investor perception study gathers candid feedback from investors and analysts about how they view a company, its strategy, and its management.

Investor targeting is the practice of identifying and proactively reaching the institutional investors most likely to buy and hold a company’s stock.

Non-GAAP measures are financial metrics that adjust standard accounting figures to exclude items management considers non-representative, such as adjusted EBITDA or adjusted EPS.

Public float is the portion of a company’s shares that is freely available for trading by the public, excluding restricted and insider-held stock.

A quiet period is the window before an earnings release when a company limits communication with investors to avoid selectively disclosing results.

Regulation Fair Disclosure (Reg FD) is an SEC rule requiring public companies to disclose material information to all investors at the same time, not selectively.

A roadshow is a series of meetings where company management presents to investors, used both around capital raises and as ongoing non-deal outreach.

A sell-side analyst works at a brokerage or investment bank and publishes research, ratings, and estimates on companies for the investing clients the firm serves.

Beta measures how much a stock’s price moves relative to the overall market, serving as a core input to the cost of equity.

Comparable Company Analysis, often called comps, values a company by applying the valuation multiples of similar public companies to its own financial metrics.

The cost of equity is the return shareholders require for the risk of owning a company’s stock, commonly estimated with the capital asset pricing model.

A discounted cash flow (DCF) values a company by projecting its future free cash flows and discounting them back to today using a required rate of return.

Earnings per share (EPS) is a company’s net profit divided by its shares outstanding, the per-share measure of profitability that anchors the P/E ratio.

EBITDA is earnings before interest, taxes, depreciation, and amortization, a widely used proxy for a company’s core operating profitability.

Enterprise value (EV) is the total value of a business to all its investors, calculated as equity value plus net debt, and it is the basis for most valuation multiples.

The EV/EBITDA multiple divides enterprise value by EBITDA, showing how many dollars investors pay for each dollar of operating profit, independent of capital structure.

Free cash flow is the cash a business generates after funding the operating expenses and capital investments needed to maintain and grow it.

Market capitalization is the total value of a company’s outstanding shares, calculated as share price times shares outstanding.

Precedent transactions analysis values a company using the multiples paid in past acquisitions of similar businesses, capturing what real buyers have actually paid.

The price-to-earnings (P/E) ratio divides a company’s share price by its earnings per share, showing how much investors pay for each dollar of net profit.

Terminal value is the estimated worth of a business beyond the explicit forecast period of a DCF, often making up the majority of the total valuation.

The weighted average cost of capital (WACC) is the blended rate a company pays to finance its operations across debt and equity, and it is the standard discount rate in a DCF.

Customer concentration measures how much of a company’s revenue depends on its largest customers, a key risk that can lower valuation or reshape a deal.

A data room is the secure repository where a seller shares financial, legal, and operational documents with prospective buyers during due diligence.

Deferred revenue is cash a company has collected for goods or services it has not yet delivered, and in a deal it is often treated as a debt-like item.

EBITDA add-backs are one-time, non-recurring, or owner-specific expenses added back to reported EBITDA to show the company’s true ongoing earning power.

An EBITDA bridge is a step-by-step reconciliation from a company’s reported EBITDA to adjusted EBITDA, showing each add-back and adjustment in between.

Net debt is a company’s total debt plus debt-like items minus its cash, and it is deducted from enterprise value to determine the price actually paid to equity holders.

Net Working Capital (NWC) is current operating assets minus current operating liabilities, the cash a business needs tied up to fund its day-to-day operations.

Pro forma adjustments restate historical results to reflect the business as it will operate going forward, covering run-rate changes, acquisitions, and other standard normalizations.

A proof of cash reconciles a company’s recorded revenue and expenses to the actual cash that moved through its bank accounts, confirming the reported numbers are real.

A Quality of Earnings (QoE) analysis assesses how sustainable and accurate a company’s reported earnings are, separating durable operating profit from one-time or accounting-driven boosts.

A sell-side quality of earnings is a QoE analysis a company commissions on itself before going to market, to anticipate buyer questions and defend its value.

Trailing twelve months (TTM or LTM) is a company’s financial performance over the most recent twelve months, used in diligence to capture the current run-rate of the business.

A working capital peg is the normal level of net working capital a buyer expects to be delivered at closing, used to true up the purchase price.

Asset and stock deals are the two main structures for an acquisition, differing in what the buyer actually purchases and how liabilities and taxes flow.

An earnout is a portion of the purchase price paid to the seller only if the business hits agreed financial targets after closing, bridging gaps in valuation.

An escrow or holdback sets aside part of the purchase price after closing to cover potential claims, such as breaches of the seller’s representations.

A letter of intent (LOI) is a mostly non-binding document that sets out the key terms of a proposed deal, signaling serious intent and framing the diligence to follow.

A leveraged buyout (LBO) is an acquisition financed largely with borrowed money, where the target’s own cash flow is used to repay the debt over time.

A management incentive plan (MIP) is an equity pool set aside to reward the leadership team of an acquired company for growing its value after the deal.

Purchase price allocation (PPA) is the process of assigning the total price paid in a deal across the acquired assets and liabilities, including goodwill, for accounting and tax purposes.

Representations and warranties are the seller’s formal statements of fact about the business in a purchase agreement, with breaches giving the buyer a claim for damages.

Rollover equity is the portion of sale proceeds a seller reinvests into the acquiring entity, keeping them as a co-owner with a stake in the future upside.

A seller note is financing the seller provides to the buyer, effectively lending part of the purchase price to be repaid with interest over time.