- Price/Earnings Ratio
- Price/Earnings Ratio (what does for example, "20" mean? price 20 times higher than earnings?)
- Principal
- In finance, this describes the original amount granted as credit, excluding interest.
- Private Equity
- A term describing an investment model collecting funds from investors, which subsequently are used to purchase, manage and sell equity in companies. Private Equity companies typically operate with significant leverage and quick turnarounds. One characteristic of companies financed by Private Equity often is a significantly increased debt level. This stems from a common practice of Private Equity firms to very quickly again extract their investments after purchasing a stake in a company. This typically happens through debt raised by the purchased company, which subsequently is paid to the owners in the form of a special dividend of fees.
- Production Function
- A production function describes the relationship between inputs and outputs of economic activities. It typically looks like Y = Lα x Kβ (simplified), where Y is the output, L is (human) labor input and K capital (e.g. the inputs purchased with money). The α and β factors describe (increasing) elasticities driven by technology driven gains.
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