Corporate Finance Glossar

Financial due diligence analyses historical and forecast financial information to test earnings, cash, working capital, debt and transaction-specific financial risks.

A financial investor in Mergers and Acquisitions (M&A) transactions refers to an individual or institution that provides capital to acquire equity stakes in companies. Unlike strategic investors, who seek synergies with their existing operations, financial investors primarily aim for financial returns on their investments. They typically include private equity firms, venture capitalists, and hedge funds.

Free cash flow is cash generated after defined capital expenditure, with the starting cash measure and every deduction stated clearly.

Fully diluted shares are the total shares that would be outstanding under a stated convention if specified options, warrants and convertible instruments were exercised or converted.