Accelerator "Accelerators", like an incubator but for advanced start ups, which already bring along venture capital. With an accelerator the growth of the company is to be rapidly developed.
Accounts payable period The accounts payable period gives information about the company’s speed of payment of trade accounts payable. It indicates how many days an enterprise takes to pay the supplier's invoices. The higher the average account payable period, the more favourable it is for the liquidity of the company.
Analysis of sensitivity The analysis of sensitivity is a procedure for examining the effect of changed input variables on the appropriate outputs. This serves to determine the stability of the result, if the input variables are subject to a deviation range, as well as determining the relevant input sizes, in order to be able to influence these in the sense of the output optimisation.
Assets A company's assets is the sum of all factors of production required by the Company in the form of money, rights (e.g. patents, licenses) and material resources (e.g. raw materials, machinery, buildings, land). A distinction must be made between variable and fixed assets.
Asset Deal Acquisition by way of purchasing of individual assets (instead of shares). Unlike "share deal".
Asset Stripping Sale of net assets or sub-areas of an acquired company immediately after its take-over. Typical motives are either to finance the purchase or the possibility of increasing the total value by selling individual parts. However the tax implications must be considered here.
Averaging procedures The term average value method covers several methods for the valuation of a company value. The earnings value and the intrinsic value of an enterprise are recorded. The company value is thereby determined in individual ways with a different but set weighting of the values when calculating the average values. In Switzerland 2 times the earnings value and 1 time the intrinsic value is used to calculate the company value. The Stuttgart procedure uses 1 time the earnings value and 2 times the intrinsic value for the calculation. The Berlin procedure weights both values in equal parts.
Beauty-Contest The Beauty Contest is a kind advertisement where the banks court a company to accompany it on the stock exchange. Or the courtship of banks by the company in order to win them as a consortium partner.
Benchmark Benchmarking is the comparison of achievements between a company and those from other enterprises. An indicator is thereby respectively designated as a bench mark of the different companies. The goal of such a comparison is to discover possibilities for improvement and competitive disadvantages as well as in the long run to increase the efficiency of the company.
Book-building Pricing mechanisms for determining the issue price for new issues. Here a period is set, in which the bids can be placed within a certain price range. Once these are received, the final sales price is fixed by the Consortium.
Break-Even-Point The time when the break-even point is passed and a profit is realized or when the turnover covers fixed and variable costs.
Bridge Financing Bridge financing is the generic term for the short-term or bridging finance, at short notice, for certain transactions (real estate purchase, company acquisition) up to the final follow-up financing, provided by credit institutes.
Burn Rate Corresponds to the time interval, until the company has used up the provided capital (term developed during the Internet bubble around the turn of the century). The Burn rate is in particular of great importance with newly established companies/start ups. In the initial phase of the enterprise when the financial resources of the enterprise are thereby reduced by the high percentage of fixed costs, with only a low turnover in return.
Business Angel Wealthy individual (usually experienced entrepreneurs), that support young companies when founding with capital and / or active support (coaching or management assistance) and contacts (reward through involvement in the company).
Business plan Description of the business model of a young company to present at its launch; this includes information about product ideas, market, management team and the future operations, economic analysis, etc.
Buy-and-Build Strategy Acquisition of several companies to set up a large group / holding company.
CAGR Abbreviation for Compound Annual Growth Rate (annual rate). Growth rate is the average relative increase in size per time unit.
CAPEX Capex is an abbreviation for Capital Expenditure. This term refers to the capital expenditures of an enterprise for long-term tangible assets, as for example machines, buildings or computer systems.
Cash Flow The cash flow from the operational activity (operational cash flow) covers all money transactions in and out, which are connected with the actual production of the enterprise. Examples: the sale of products or the wage payments.
The cash flow from the investment activity (cash flow from investments) consists of money transactions in and out which result from the investments and/or the investments of an enterprise. Examples: the installation of a new production plant or the sale of a storage hall.
The cash flow of the financing activity (cash flow from financing) includes money transactions in and out, in connection with the financing of the enterprise activity. Examples: interest payments or the issuing of dividends, in addition, a borrowing or a capital repayment.
Cash Flow Deal Traditional form of Management Buyout (MBO), which is financed largely on the basis of the generated cash of a company. Key variable is the cash flow from which the return of the funds received and their interest must be taken into service.
Cash Ratio Corresponds to the liquidity of 1st degree. The relationship of the liquid means to the short term commitments of an enterprise indicates and permits thereby an analysis as to what extent an enterprise can fulfil its present short term liabilities by its liquid means alone. The accounts receivable (debtors) are not considered thereby.
CEO Chief Executive Officer
CFO Chief Financial Officer
COO Chief Organisation Officer
CTO Chief Technological Officer
Co-Investment Participation in a company with a minority interest, such assistance is accepted by a lead investor and thus reducing the support effort for the co-investor.
Co-Lead Investment Participation in a company at the same level as the lead investor, however, safeguards the support of the investee.
Confidentiality agreement Also: Non Disclosure Agreement (NDA). Usually to be agreed on during the forwarding of business plans or company presentations to a third party. The prospective customer declares in agreement that he will not pass information on to third parties.
Consortium Group of all supporting banks during a listing.
Consortium leader Responsible bank during the listing of an enterprise.
Co-Venturing Participation in a company by several investors, one of whom acts as the lead investor.
Cover amount The cover amount is the difference between obtained proceeds (conversion) and the variable costs in the costing and performance calculation. It concerns the amount, which represents the cover of the fixed costs.
Current Ratio Corresponds to the liquidity of 3rd degree, indicates the relationship of the circulating capital to the short term commitments of an enterprise. If the Current Ratio is less than 1, a part of the short term commitments is not covered by the circulating capital, i.e. fixed assets must be sold to cover the commitments. Therefore this liquidity indicator should be greater than 1, whereby according to the so-called "Banker's rule" (also called the Two-to-One-Rule) should focus on a minimum value of 2.
Debtor running time The debtor running time gives information about the payment speed of the customers. It corresponds to the time between rendering an invoice and receipt of payment of the customer. The longer the period of debtors in the enterprise, the more sluggish the receipt of payment affects the liquidity more unfavourably.
Deferred taxation These are hidden fiscal charges or - benefits, which are the result of differences in the beginning and/or in the evaluation of assets and/or debts between the tax balance and commercial balance sheet and which in later financial years will presumably reduce, i.e. in the future lead to differences between fiscal and commercial balance sheet profits lead themselves. Active deferred taxes illustrate future tax benefits (higher profit potential in the future for taxation), passive deferred taxes future fiscal charges (higher yield potential in the future for taxation).
Degree of asset cover 1 Information on how high the equity to fixed assets ratio is.
Degree of asset cover 2 Information on how high the equity (+ long term debts) to fixed assets ratio is.
Dilution If a company in the context of increasing capital, issues additional shares and the existing shareholders do not participate according to their current share, the shares of existing shareholders lose their value, they are diluted.
Discounted Cash Flow Method The possibility of determining the value of the company, calculated on the basis of discounted future cash flows over a certain period of time. With it the company’s value is determined by totalling the market value of the equity and debt capital. Basic principles are projected free cash flows and a residual value, which are discounted to their present values. The liabilities are deducted from this total.
Due Diligence An inspection carried out on behalf of a buyer, e.g. business, tax and legal situation and planning, in the company to be purchased. The goal is to anticipate and avoid potential risks, which could have influence on the future business. This final detailed investigation, testing and evaluation of a potential investee company serves as the basis for the takeover decision.
Early Stage (Financing) Financing of the first phases of new businesses privately owned with own capital funds. Usually specialised enterprises (venture capital companies) offer Early Stage Financing. These enterprises often together with financing services offer for young enterprises, for example, advisory assistance and regular control of the total activity of the enterprise. This financing is often connected with large risk, offers however in the event of a later success of the young enterprise large profit possibilities.
EBIT Earnings Before Interest and Taxes.
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation.
EBIT Margin The EBIT margin is calculated as the ratio of EBIT to sales. It can be used as a relative indicator to compare the profitability of different companies.
EBITDA Margin EBITDA consists of net income before taxes combined, the net interest expense and the amortisation of the company. Due to international regulations and accounting makes it possible to build, more meaningful comparisons on the EBIT of operating performance as the reported net income.
Economic Value Added (EVA) KPI, which is used in the context of a comprehensive measuring of performance and increase in value concept. The Economic Value Added starts by calculating a value-oriented residual income of the investment, which can be evaluated. An investment is, according to this, worth-creating if it generates a positive "Spread" (Difference) between actual net yield and the demanded capital costs.
Equity capital ratio The equity capital ratio indicates the economical portion of one’s own capital funds of the settled balance sheet total of an enterprise. The higher the number, the lower the debt ratio.
Entity Method Variant of the Discounted Cash Flow evaluation method on the total capital basis, with which the gross value of the enterprise is determined. A detailed planning of the Free Cash Flow is first made for a period from five to ten years. These gross factors are discounted afterwards with the WACC. In order to now obtain the effective value of the equity, the borrowed capital must be subtracted.
Equity Method Variant of the Discounted Cash Flow evaluation method, with which the value of own capital funds is directly determined. A detailed planning of the cash flow is first made for a period from five to ten years. The interest is to be added and the in/decrease of the financial debts subtracted. These net factors are to be discounted then with the cost of equity, which results in the value of own capital.
Equity Own capital
Equity Kicker Equity Kicker means the possibility of participating in the entrepreneurial success. This can be e.g. in the transformation of Mezzanine capital into own capital funds, thus a “genuine” participation. Likewise when in the future the company becomes listed, an investment in shares is possible. So the possibility is granted to outside capital lenders to acquire a percentage of the partnership or incorporated company, which can be financed at a later time, often under special conditions.
Equity Story Documentation as part of an emission process, in which the essential characteristics of the company and its planned corporate strategy are shown (the success story of the company, in the past and in the future).
Earned Value Earned value is the value of a company's future success, which is dealt with by the company valuation. The future success of the sustainable recoverable means the future profitability of the company taking into account the interest rate.
Earnings method The earnings method is a traditional method for business valuation. With the earnings method one tries to determine the "true earnings" of the company or the expected future profits that can be achieved with long-term normal corporate performance.
Executive Summary Summary example of a business plan.
Exit Exit from an investment of an investor by selling his interest in the way of a buy back, trade sale, secondary purchase, or going public. This procedure is also known as the Exit Strategy, a strategy to realise the profits from an investment.
Expansion Financing Growth and expansion financing. The company concerned has reached the break-even point or is making a profit. The funds are used to finance additional production capacities, product diversification, market expansion and / or used for additional working capital.
Fair Value The fair value is used according to IAS and U.S. GAAP as a generic term for all market-related valuations. The fair value of an asset or a liability generally means the amount for which two independent parties with expertise and a determination to close would be prepared to pay to replace the asset or the liability.
First Round Financing First round financing of a company that receives external equity for the first time.
Going concern value The parts of the assets are evaluated at those values, which their current replacement would cost at market prices (reproduction value of the enterprise). The replacement values are calculated from the purchase values at current prices less the write-offs (depreciation due to age).
Free Cash Flow The Free Cash Flow corresponds to the operational cash flow less the cash flow from investments. The Free Cash Flow is the amount, which results from the general survey of the business activity. It is the money, which is freely available, in order to satisfy the requirements of the investors.
Fund-Raising Attracting investment capital. Initial phase of a venture capital fund (VC funds) obtained from institutional, industrial or private investors for funds to subscribe for shares. Most VC firms put up funds at irregular intervals where they collect the money that they then invest in other companies. The better the track record of a VC company, the greater their chances to collect money in the future.
Going Private Repurchase of a company from the stock market into private ownership.
Going-Public Initial Public Offering of a company. See also IPO.
Greenshoe / Over-allotment option The Greenshoe (or over-allotment option) is a component of the Book-building procedure. The emitting enterprise grants a certain number of shares to the banking group set beforehand, which it can acquire at the issuing price. The Greenshoe is a means for the consortium banks to be able to better adapt the number of the issued shares to the demand. Usually the Greenshoe originates from the ownership of the old shareholders, from the authorised capital or from an increase in cash capital.
Gross company value Company value before subtracting the outside capital. All investors are entitled to the gross company value.
Gross margin The gross margin indicates how much (as a percentage of the turnover) an enterprise earns after the deduction of the manufacturing costs. Further costs, like research and development, marketing or administration, do not enter the value. The gross margin is not synonymous with the operating result.
Hands Off After provision of equity, a company operates without intervening directly to the exit. Passive support through participation in advisory boards, supervisory boards, etc. Hands On (Active care), the investor seeks to add value by actively supporting the management.
IAS IAS = International Accounting Standards. IAS standards stand for external corporate reporting with international validity to be adopted by a multinational committee (IASC). With the development of the IAS there is an attempt to achieve global harmonisation of accounting.
IASC = International Accounting Standards Committee Is a multinational committee, which issues the IAS.
Incubator Institution in which young companies are closely supervised and developed especially in information and communication technology.
Institutional Investors Large institutions such as banks, insurance companies, pension funds or large corporations that invest in equity funds.
Investor Relations Active management of relations with current and potential investors, analysts and financial media with the aim to maintain these target groups to bind to the company's own shares.
Initial Public Offering (IPO) A term for the initial public offering of shares of a company.
Internal Rate of Return (IRR) The IRR is the rate of discount, with which the Present Value (PV) of the net Cash Flows (NCF) of a project is its acquisition investment. The rate of discount, with which the Net Present Value (NPV) of the project equals zero.
Intrinsic value The intrinsic value is a replacement value. This means the money, which one must apply to accurately replicate an existing enterprise. The intrinsic value covers all tangible and intangible assets of the enterprise (e.g. patents and licenses), which can be sold in the market.
Intrinsic value method The intrinsic value method is a traditional method of business valuation which records the intrinsic value in the form of daily values of the assessable assets needed for the operation. The intrinsic value method is not an independent process of business valuation but will be consulted in addition.
Joint Venture Cooperation agreement for the joint operations of a company, the capital to be introduced, etc. to be supplied the know-how, etc.
Later Stage Financing Finance expansions, acquisitions, bridges, etc. in established companies.
Lead Investor In a syndicate of VC companies, the investor with the largest share of the organisation takes over both the financing and the Hands-On service.
Letter of Intent (LoI) Declaration made in writing prior to a transaction in which the intention of the buyer and seller to conclude the business sale are expressed.
Leverage Level of foreign debt of a company, usually expressed as the ratio of debt to equity.
Leveraged Buy-Out (LBO) Predominantly debt-financed corporate takeovers.
Liquidation value Describes what (theoretical) proceeds there would be from the liquidation of a company if the existing assets were sold individually.
Listing Listing a company on the stock exchange.
Lock-up-Period "Closure" period. For example, time period after an IPO, while the previous owners are not allowed or only very limited, to sell their shares converted into shares. The Lock-up-Period is regulated very differently in Europe.
Make or Buy Deciding whether to make or buy a product or a service.
Market capitalisation The market capitalisation expresses the exchange value of a company. It is calculated by multiplying the share price by the number of shares.
Management Buy-In (MBI) A Management Buy-In is present if an enterprise is taken over by external management or the takeover is forced with the help of an investor by a strange management. This comes off above all if an external management is convinced that the enterprise is badly led and could be more efficient through better guidance. In addition this is a possibility of taking over an enterprise in the context of a follow-up solution.
Management Buy-Out (MBO) The purchase of an enterprise or a part of the enterprise and/or a controlling portion of it by the management of the enterprise. Often such a buy-out is financed by private Equity investors and to a large degree with outside capital (Leveraged Buy Out (LBO)), since managers often cannot apply the necessary financial means.
Market value The market value corresponds the purchase price attainable under normal conditions without consideration for unusual or personal conditions.
Merger The merger is the equivalent of two or more companies merging into one new company. In reality, however, it is a so-called "friendly takeover" of the companies involved. The agreement on the word merger is to attenuate the sale character of the transaction regarding third parties. There is to be no outward purchaser and no takeover.
Merger & Acquisition Mergers & Acquisitions M & A is just the technical term for the whole market for business transfers and corporate takeovers.
Mergers & Acquisitions It is the allocation of shares and entire companies against commission. The services of M & A firms include: consulting, property search, buyer and seller search, implementation support and funding.
Merging Technical term for matching the various data in a database. For example, the data from a buyer (purchase price, location, interest, trade) is "merged" with a matched seller (purchase price, the company's site, branch). The aim of merging is to determine matches.
Mezzanine Mezzanine capital or Mezzanine financing (derived from the architectural term story between the ground and first floor) describes all forms of funding to fill the funding gap between debt and equity in the capital structure. In the traditional variant a company is supplied economical or own capital funds relating to the balance without granting the financial sources or influencing control rights and/or residual claims as the genuine partners.
Net company value Company value after subtracting the outside capital. The net company value is the part that the own capital funds investor is entitled to and is thus to equate with the effective value of own capital funds.
Net Present Value (NPV) Net Present Value, or NPV for short, is a procedure to calculate the dynamic investment. By discounting the beginning of the investment makes the payments - made at arbitrary times - comparable.
Net circulating capital Circulating capital minus short term outside capital.
Net Present Value The anticipated future cash value of the expected cash amount is referred to as the net present value or actual cash value. The net present value is calculated by deducting the future cash equivalent with capital interest, which is the expression of an alternative achievable rate.
Net turnover Turnover after deducting value added tax and proceeds reductions.
NOPLAT On the basis of the NOPAT (EBIT less income taxes), the NOPLAT considers additionally the fact that no taxes are paid on the interest expenditure. NOPLAT is also occasionally called Earnings before Interest (EBI).
On profit methods It is a traditional method of business valuation, where the value of the company is determined with the help of over profit. The profit is the value addition, which is achieved through the normal return on the asset.
Outside capital ratio The outside capital ratio indicates the portion of the outside capital of the total capital and/or the balance sheet total, similar to the equity capital ratio for own capital funds.
Oversubscription If demand is greater for the shares of an initial listing than the number of shares issued, the shares are oversubscribed. A 10 times oversubscription means therefore that the demand is ten times greater than the available quota shares.
Owner’s profit EBITDA The owner’s profit at EBITDA level (profit factor in the success estimation before interest, taxes, writings-off and remaining adjustments of value) proceeds from the KPI of the EBITDA in accordance with the P&L account. Then added to the wages of the owner are also all the expense not-needed for the operation (also for taxation based optimisations), which are to be regarded directly or indirectly as achievements in favour of the owner. Thus the official conclusion is settled and the effective yield capacity of the enterprise is represented.
Pay Back Duration Period in which the sum of the capital flow of an investment object (with a static amortisation calculation) or its cash value (with a dynamic amortisation calculation) exceeds, for the first time, the amount of investment. Timeframe for the amount invested plus capital gain, realised on exit. This period is called cash recovery period or reflux of capital duration.
Portfolio Sum of the total equity capital invested in an investment company.
Pricing The pricing is a matter of corporate decision. It is the decision for a certain price, which the company will be offered on the market. It differs from the value assessment, as this is a subjective decision. Therefore the price cannot be on an equal footing with the company value. Although the enterprise is written down at a certain price at the market, supply and demand in the long run always decides the definite price.
Price Earning Ratio PER (price-earning ratio)
Private Equity The term for all-equity forms of investment: venture capital, mezzanine, and LBO. Participation in regular markets (stock exchanges) is not commerciable.
Private Placement Private placement of shares without recourse to the stock market as opposed to the public offering.
Public Offering Public offering of shares on the stock market as opposed to the private placement.
Purchase Price The purchase price is the price of a company to which both parties have agreed. The purchase price may differ materially from the different observed prices in the value finding as well as the previously agreed price determination. The purchase price of a company is its market price.
Quick Ratio Corresponds to the liquidity of 2nd degree. Indicates the relationship of the financial resources regarding the short term demands plus security stock and the short term commitments of an enterprise. It is a measure as to whether an enterprise is able to pay its short term commitments. With a Quick Ratio, which is less than 1, a part of the short term commitments does not cover assets available in the short term. Measure of corporate liquidity to assess the creditworthiness of a company (total assets: total liabilities)
Residual value This is the value of a company or a project during their continuation beyond the planning horizon. During the evaluation, by means of the Discounted cash flow method, the cash flows are projected for a certain time period and discounted at the current time. For all the following cash flow on the prognosis period, the total is determined and its cash bar value is determined, what is then called Residual value. When calculating the Residual value great note is taken of emergencies, since small deviations in the assumptions already lead to large value differences.
Return on Assets (RoA) This is total capital profitability (also: Total capital net yield, return on investment). It indicates how efficient the capital rate of an investment project was within one accounting period. This ratio is often used as an efficiency measure, and plays an important role in the presentation of the company to shareholders and banks.
Return on Equity The Return on Equity and/or ROE) documents how much interest the capital invested by the financial source has yielded within one calculation period.
Return on Investment (ROI) That is the gross return on investment of an enterprise, which is calculated from the profit before interest divided by the entire assigned, capital necessary for the operation (outside capital and own capital funds). It indicates how efficiently an enterprise has used its available capital.
Return on Sales (ROS) ROS is the net income as a percentage of sales. This is similar to the ROA ratio as a measure of effectiveness.
SbA Swiss abbreviation for other operational expenditure (sonstigen betrieblichen Aufwand).
Scope of inventory The scope of inventory defines the time, for which a stock is sufficient with planned materials consumption. A low scope can lead to a high stock shortfall costs, to capital freeze and/or stock program costs.
Second Round Financing Second round of financing for a company that has already received a first round of venture capital.
Secondary Purchase Exit option. Sale of shares of a venture capital firm in a company to another venture capital company or financially interested partners.
Seed Capital Financing of the maturation and transformation of an idea into actionable results in the prototype that will be created on the basis of a business plan for a company that is to be founded.
(Pre-) Seed-Phase Phase before the formal founding (pre-founding phase).
Service fee Service fee = retainer fee or start fees. It is the fee charged by a company or broker prior to entering his activity. Charging the fee is meant to verify the seriousness of the seller’s intent to carry out the sale of the company.
Share option employee Form of employee involvement. The right to acquire shares or shares options of the company at a favoured price after a fixed waiting period.
Share Deal Acquisition by purchase of shares.
SME SME is an abbreviation for "small and medium-sized enterprises".
Spin-Off Outsourcing and independence of a department or a business unit of a company / group. With a spin-off, the original company still exists. In only one or several parts, which form a definable unit, on an existing company or one which is to be established again.
Start-up Phase immediately after the founding of a company, often also called for a strong young growth company.
Start-up-Financing Young not yet established enterprises, which are created for the implementation of an innovative business idea with small starting capital and usually are dependent very early for the expansion of their business and stabilisation of their capital basis either on the receipt of Venture Capital and/or Seed Capital (possibly also by Business Angels) or on a stock exchange listing (IPO).
Stuttgart method The Stuttgart-based method is a method for business valuation. This method is often used in company contracts. Usually it is used by accountants and lawyers.
Subordinated Debt The subordination refers to the ranking of foreign investors with one another, especially for comparison or liquidation.
Subscription period Period, during which investors can draw new shares. This takes place in the form of a letter of intent with which investors commit to purchase a specified number of shares.
Success fee The success fee is paid to a business broker after the successful completion of a corporate transaction. In general, the success fee is payable at the moment a sale is concluded, as this is when the work of the corporate agent ends.
SWOT analysis Analysis of Strengths / Weakness / Opportunities / Threats analysis.
Syndication Even greater investments to fund high-risk ventures there is the merger of several private equity firms.
Target Target company for a corporate acquisition or equity investment.
Track Record Experience record of a holding company or a company, a manager or entrepreneur.
Transaction Multiples Proportionality factors, which come from effective prices from enterprise purchases.
Underwriting The obligation of members of an underwriting syndicate, to take a certain portion of shares to be placed regardless of whether the underwriter is able to place the shares with the public. For this guarantee obligation, the underwriters will receive an additional commission with the Underwriting Fee.
Unique Selling Proposition (USP) Term from marketing, "unique offer for sale" or USP.
US-GAAP This term includes the U.S. Generally Accepted Accounting Principles adopted. The focus is on U.S. GAAP, especially the investors' interests. In addition, it is in the tradition of American Case Law, which is based heavily on individual cases.
Venture Capital (VC) Financing young, high growth companies primarily in the technology sectors by institutional investors (e.g. venture capitalists) or informal investors (e.g. business angels). The funding, in contrast to lending, is not through eligible assets like collateral or the owner of the company, but the company is financed instead solely on the expected earnings potential of the company.
WACC The capital cost rate WACC is an average total capital cost rate, which results as a weighted means of own and outside capital cost rate of the capital market. The own and outside capital portions are to be consulted for the weighting due to the market value.
Replacement value Acquisition value of an existing asset at the time of its replacement in the enterprise.
Working Capital (Net Working Capital) This term is the net current assets, i.e. all the variable assets tied up for the short term (inventories, receivables with a remaining term of 1 year, cash equivalents and prepaid expenses) minus the current short term liabilities.