To view this email as a web page, click here.

TERM OF THE DAY

A leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company.

Are you enjoying this newsletter? Forward this link to share financial terms in today's investing news with a fellow friend or colleague today.

The cost of acquisition is the total expense incurred by a business in acquiring a new client or purchasing an asset. Read more

Debt-to-Equity (D/E) Ratio Formula and How to Interpret It

The debt-to-equity (D/E) ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders’ equity. Read more

Balance Sheet: Explanation, Components, and Examples

A balance sheet is a financial statement that reports a company's assets, liabilities and shareholder equity at a specific point in time. Read more

Collateral - Definition and Examples

Collateral is an asset that a lender accepts as security for extending a loan. If the borrower defaults, then the lender may seize the collateral. Read more

How can we improve Term of the Day? Tell us at term@investopedia.com

Were you sent this by a friend? Click here to subscribe.

You are receiving this newsletter because you subscribed to the Term of the Day newsletter. If you wish to unsubscribe, please click here.

Investopedia is part of the Dotdash Meredith publishing family.