C Corporation – One of three types of corporation (the other is the S corporation and LLC or Limited Liability Company). Taxes are paid once at the corporate level and again when the earnings are distributed to the shareholders. It allows various classes of stock: corporate shareholders as well as alien shareholders.
Capital Structure – The mix of invested equity and debt financing of a business enterprise.
CAP-X – The acronym for Capital Expenditures that are necessary within the next year.
Capitalization – Companies have ownership capital that includes stock and paid-in surplus plus borrowed capital that includes bank debt and bonds. The combined forms of capital, ownership, and borrowed funds is a company’s capitalization.
Capitalization Rate – The conversion of income into value as part of the valuation process by the application of a capitalization factor (any multiplier or divisor used to convert income to value).
Capitalizing Net Income – Determining the value of a Company by dividing annual adjusted income by the capitalization rate (required ROI).
Cash Cow – A business that has steady cash flow in which earnings have remained nearly the same for the past few years, and can be expected to continue into the future.
Cash Flow – The amount by which the total cash coming into the business from all sources exceeds the total cash going out.
Cash Flow Statement – An analysis of all the changes that affect the cash account during an accounting period. These changes may be shown as either sources or uses of cash.
Closing – The endpoint of a sale or agreement, where the subject of the deal (such as a business, property, or loan) changes hands from the seller to the buyer.
Closing Costs – Various fees and expenses payable by the seller and buyer at the time of a business closing also termed transaction costs.
Closing Date – The date on which the seller delivers the deed (bill of sale) and buyer pays for the business.
Closing Statement – An accounting of funds from a sale of a business, made to both the seller and the buyer separately.
Collateral – Property pledged by a borrower to protect the interests of the lender. Bank loans are often collateralized or secured by the company’s accounts receivable, inventory, or equipment.
Confidentiality – The entrustment of proprietary information from one party to another for their exclusive use so as not to impart the obtained knowledge to others.
Confidentiality Agreement – A pact that forbids buyers, sellers, and their agents in a given business deal from disclosing proprietary information about the potential transaction to others. Sometimes it is called an NDA or Non-Disclosure Agreement.
Contingent – Dependent on or conditioned by something else. The price established for the business varies in relation to some future event.
Contingent Payments – Future financial obligations are dependent on contractual events that take place.
Conventional Bank Financing – In the realm of small business transfer, it is financing provided to a buyer based on a company’s assets and the buyer’s collateral.
Chartered Accountant – Canadian Designation for Certified Accountant
Covenants – A promise in an agreement or contract agreeing to performance or nonperformance of certain acts, or requiring or preventing certain acts or uses.
CPA – Certified Public Accountant – U.S. Designation