Enterprise Value (EV)
The enterprise value of a portfolio company
EV = Equity plus net debt
The percentage of Enterprise Value represented by Debt.
Debt Capitalization = debt/(equity + debt)
The percentage of Enterprise Value represented by Equity.
Entry Capitalization = equity/(equity + debt)
The ratio of Debt to Equity.
Leverage = Debt/Equity
The sum of amounts returned from a deal (distributions) and valuation of the deal as at the track record date.
Total Value = Distributions + Valuation
A definition of profit based on Earnings Before Interest, Tax, Depreciation and Amortization.
A portfolio company’s profit margin. Expressed as a percentage
EBITDA Margin = EBITDA/Revenue
What multiple of EBITDA, the EV of a business represents.
Multiple = (Equity + Debt) / EBITDA
What multiple of EBITDA, the debt of a business represents.
Investors who are required to select and monitor investment managers should develop a basic understanding of investment statistics. Quantitative tools can provide you with good insight that you can use in your qualitative interviews with managers and when monitoring your investments.