Leveraged Buyout

Definition

Buying a company using mostly borrowed money, which is the corporate equivalent of buying a house with no money down except the house is a billion-dollar company. The acquired company often ends up paying for its own acquisition, like making someone pay for their own kidnapping ransom.

Example Usage

"The private equity firm executed a leveraged buyout, loaded the company with debt, and then blamed management when things went south. A tale as old as time."

Related Terms

Beginner

Equity

The theoretical money trapped inside your walls that everyone talks about but you can never actually touch without borrowing against it. It's like Monopoly money that your house keeps score with.

💰 Finance / Accounting🏠 Real Estate

Advanced

consolidation

Combining the financial statements of a parent company and its subsidiaries into a single unified report, eliminating intercompany transactions to avoid counting the same revenue twice. It's like merging family budgets while hiding the money you owe your brother.

💰 Finance / Accounting

Intermediate

evergreen loan

A revolving credit facility that automatically renews, giving borrowers perpetual access to funds as long as they meet conditions. It's the financial equivalent of a gym membership that never expires—convenient until you can't make the payments.

💰 Finance / Accounting

Intermediate

free cash flow

Cash from operations minus capital expenditures—the actual money left over after keeping the business running that can be used for dividends, buybacks, or acquisitions. It's the ultimate 'show me the money' metric that cuts through accounting games.

💰 Finance / Accounting

Beginner

audit

The financial equivalent of a surprise inspection where someone with a calculator and a suspicious mind examines your records to ensure you're not committing creative accounting. It's an independent review of financial statements, controls, and compliance that either confirms everything's fine or ruins everyone's year. The word alone can make CFOs break into a cold sweat.

💰 Finance / Accounting

Intermediate

Golden Parachute

A massive payout given to executives when they get fired, because apparently failing at the highest level should be rewarded with generational wealth. It's the corporate equivalent of getting expelled from school and receiving a Ferrari as a consolation prize.

💰 Finance / Accounting

Translate This Term

See “Leveraged Buyout” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Beginner

rng

random number generator...