FL PL, Level 17 - Real Estate Investments & Business Opportunity Brokeraage

appreciation

the increase in value of a property

asset

item of value

basis

the cost of purchasing a property plus the cost of any improvements, minus the amount of depreciation

capital gain (loss)

the increase or decrease in the value of an asset

cash flow

the cash that an investment generates after accounting for the operating expenses, debt service, and taxes associated with the enterprise

liquidity

the relative difficulty of converting an asset to cash without loss of value

risk

the likelihood that an investment will fail to return or increase the initial investment

tax shelter

any strategy used to minimize the amount of taxable income and, therefore, reduce the taxes owed to the government

leverage

the use of a financial instrument or borrowed money to increase a return on investment

going concern value

the value of a business including intangible assets like goodwill

goodwill

an intangible asset of a business that includes the company's brand, good name, and loyal customer base

liquidation analysis

a business appraisal strategy that assigns a value to a business being liquidated — it sets the value of any resellable assets against the cost of paying preferred stockholders and any other liabilities