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CRS is committed to providing its clients with the information they need, when they need it. To deliver on that promise, we've compiled an easy-to-use glossary for commonly-used industry terms and phrases.
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Glossary: A-D / E-H / I-L / M-P / Q-T / U-Z
Income Approach – A general way of determining the value indication of a business, interest, security or intangible asset that uses one or more methods that convert anticipated economic benefits into a present single amount.
Intangible Assets – Non-physical assets such as franchises, trademarks, goodwill, equities, rights, securities and contracts that grant privileges and have value for the owner.
Internal Rate of Return – A discount rate at which the present value of the future cash flows of the investment or opportunity equals the current market cost of the investment or opportunity. (Also called the “Dollar Weighted Rate of Return”)
Intrinsic Value – The perceived value of a security, as opposed to its market price or book value.
Invested Capital – The sum of equity and debt in a business enterprise.
Invested Capital Net Cash Flows – Cash flows available to pay out to equity holders (dividends) and debt investors (principal and interest) after expenses, investments and operations have been funded.
Investment Risk – The degree of uncertainty as to the realization of expected returns.
Investment Value – The estimated price a convertible security would sell for on the open market based on the values of a particular investor’s individual requirements and expectations. (Also called “Value to the Owner”)
Key Person Discount – An amount or percentage deducted from the value of an ownership interest to reflect the reduction in value that results from an actual or potential loss of a key person within an enterprise.
Levered Beta – The beta reflecting the capital structure that includes debt.
Limited Appraisal – A professional opinion, usually written, that determines the value of a business, ownership interest, security, or intangible asset with limitations in analyses, procedures or scope.
Liquidity – The ability to quickly convert property to cash or pay a liability.
Liquidation Value – The net amount that would be realized if the business were terminated and the assets sold piecemeal. If the liquidation value per share for a company is less than the current share prices, then it usually means that the company should go out of business (or that the market is miscalculating the value of the stock).
Low Margin Business - A business that spends a high amount to generate revenues. For instance, a company spending $1.00 to generate $1.10 in revenues is a low margin business.
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