Just because you have entered the world of Investment Banking, does not mean that you have become an Investment Banker. We know that. We also know that you should not be at a disadvantage because you are unfamiliar with the terminology. Our best customers are educated customers and it is in this context, that we provide you with the most common terms that we will be using to conduct our business with you. The definition of the terms comes from www.investorwords.com. We invite you to browse this link, to find other terms that are also used in the industry and well defined to support your knowledge.

We may add to or change these terms from time to time. We want you to be savvy; it is important to us as your Financial Intermediaries, it is important to you as a business owner.

Limited Partnership: A business organization with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who are liable only to the extent of their investments. Limited partners also enjoy rights to the partnership's cash flow, but are not liable for company obligations

General Partner: A partner with unlimited legal responsibility for the debts and liabilities of a partnership.

Limited Partner: see limited partnership

Equity/Debt Ratio: A measure of a company's financial leverage. Debt/equity ratio is equal to long-term debt divided by common shareholders' equity. Typically the data from the prior fiscal year is used in the calculation. Investing in a company with a higher debt/equity ratio may be riskier, especially in times of rising interest rates, due to the additional interest that has to be paid out for the debt.

For example, if a company has long-term debt of $3,000 and shareholder's equity of $12,000, then the debt/equity ratio would be 3000 divided by 12000 = 0.25. It is important to realize that if the ratio is greater than 1, the majority of assets are financed through debt. If it is smaller than 1, assets are primarily financed through equity.

Due Diligence: The process of investigation, performed by investors, into the details of a potential investment, such as an examination of operations and management and the verification of material facts.

Returns: ROE. A measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after-tax income (after preferred stock dividends but before common stock dividends) divided by book value, expressed as a percentage. It is used as a general indication of the company's efficiency; in other words, how much profit it is able to generate given the resources provided by its stockholders. Investors usually look for companies with returns on equity that are high and growing.