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Our Affiliations • Internet Resources • Glossary of Terms

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Acquisition Loans
Loans made to finance a merger or acquisition.

Aging of Accounts Receivable
Analyzing accounts by the amount of time they have been on the books.

Agreement in Principle
An outline of the understanding between the parties, including the price and the major terms. It is often referred to as a letter of intent. Usually, the agreement is subject to the negotiation of a mutually acceptable definitive agreement.

Announced Deals
Mergers or acquisitions that are announced to the public, usually by a press release. The majority of middle market deals are unannounced.

Annuity
A series of consecutive payments or receipts of equal amount.

Assets
Any possession that has value in an exchange.

Asset Depreciation Range (ADR)
The ADR represents the expected physical life of an asset. Generally, the midpoint of the ADR is utilized to determine what class an asset falls into for depreciation purposes.

Assets Retained
Assets that an owner would keep after a merger or acquisition.

Asset Utilization Ratios
A group of ratios that measures the speed at which the firm is turning over or utilizing its assets. We measure inventory turnover, fixed-asset turnover, total asset turnover, and the average time it takes to collect accounts receivable.

Auction
An invitation for bids on a business by a specified date. In practice, the date is often extended for the three or four top bidders, who then are invited to improve their offers.

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Our Affiliations • Internet Resources • Glossary of Terms