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Glossary of Terms

Set out below is a Glossary of standard transactional terminology for private equity and corporate finance transactions. Use the filter menu if you are looking for a specific term, or to navigate the Glossary alphabetically.

P/E ratioThe P/E ratio is one of the most commonly used ways of measuring a share's value compared to its peers and is calculated by dividing a company's share price by its earnings per share. Investors tend to compare the P/E ratios of companies in the same sector or the same index. A high P/E ratio generally indicates that a company is fast growing, but can also indicate that it is a higher risk investment. A low P/E ratio often indicates that a company is more mature.

P2PPublic to Private

PBTProfit Before Tax

Private equityA term which covers a range of transactions in which the source of finance is usually a fund established to invest specifically in unquoted companies rather than in publicly quoted shares. It includes forms of venture capital and MBO financing.