Syndication: Common Financial Metrics and Key Terms to Understand

On every deal we syndicate or review there are financial numbers and metrics that are common. I also get plenty of questions from investors on them. I’m going to run through some of the ones that I think are important, not getting too bogged down but staying at a level that I think most new investors will get a better understanding. The Multiple – This is a popular and easy metric to understand. If I invest $100,000 and it grows to $200,000 (including distributions and sale profits) then it’s a 2x (double my investment). If it grows to $193,000, then it’s a 1.93x. The higher the better the return. Most of the deals we review are for a typical 5 year hold period. Cash on Cash Return – A

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