Shark Tank India Season 3: EBITA To ROI, 10 Business Terms Used In The Show & Their Meanings

After two superhit seasons, popular business reality TV show Shark Tank India is all set to return with season three, as it will premiere on January 22nd. The third season of Shark Tank India is expected to be even more thrilling, with the addition of 12 sharks on the panel.

But before you watch the show, wouldn¡¯t it be great if you are well versed with some of the common business terms used in the show? So read on as we simplify some of the financial jargons to help you understand the upcoming season of Shark Tank India better.

10 Business Terms Used In Shark Tank India And Their Meaning

View this post on Instagram

1.Valuation

Simply put, valuation or business valuation is used to determine a company's economic value.

To determine a business' valuation, factors such as capital structure, management, projected earnings, profit, and revenue margins are considered and a certain amount of money is calculated keeping these factors as the base. This is helpful for businesses looking to raise capital from investors, merge, or sell off portions of their business. In Shark Tank India, valuation helps the sharks in determining the financial standing of a company, as well as its historical performance and soundness of finances.

2.Cash Flow

The net amount of money coming into and going out of a business is known as cash flow. The term "inflow" describes the money that businesses bring in, and the term "outflow" describes the money they spend. This is significant because when there is positive cashflow, shareholders receive greater value from the money they invested into the business.

shark tank india season 3/sonyliv

Also Read: 'There Is No BharatPe Without Me,' Says Ashneer Grover

3.Equity

The term equity refers to the amount of money that the owner of a company has invested or owns in the business. The difference between a company's liabilities and assets on its balance sheet indicates how much equity the business has. The equity value is calculated using the share price or a value determined by investors or valuation specialists. Owners' equity, stockholders' equity, or shareholders' equity are other names for this account.

4.Margin

The difference between a product's selling price and its cost of production is known as the margin in business. It can also mean the profit-to-revenue ratio.

5.EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization - in short is referred to as EBITDA. It is an alternative way of calculating net income profitability. It eliminates the capital structure-dependent non-cash depreciation, amortization expense, taxes, and debt costs.

shark tank season 3/sonyliv

6.Gross & Net Profit

For any business, net profit refers to money left after having paid all your allowable business expenses, while gross profit is the amount left after deducting the cost of goods sold from the revenue.

7.Return On Investment (ROI)

Return on investment (ROI) is a measure of how much money an investor earns or loses on an investment when compared to the amount of money initially invested. It is among the key performance indicators used to measure both the efficiency as well as profitability of an investment in a business.

8.Counter Offer

Another common term you must have heard in Shark Tank India, is a counteroffer. It refers to the response given to an initial offer, for instance from another shark. Whenever someone receives a counter offer, any of the these possible options can be taken -either you can accept the counter offer, reject the counter offer, or make another offer.

shark tank judges season 3/sonyliv

9.Capital

In simple words, capital means the money a business/company needs to efficiently function on day to day basis and for an expansion in near future. Sources of capital for a company can include angel investing, crowdfunding, grants, debt and equity capital, IPO etc.

10. Burn Rate

Burn rate is another common term used in Shark Tank. Burn rate refers to the speed at which a company consumes its cash reserves. If its a new business, the rate can imply the speed at which the company is spending its venture capital to finance its expenses, which keeps on depleting its pool of money.

Shark Tank india season 3/SonyLiv

Also Read: Simple Life Lessons Young Entrepreneurs Can Learn From Shark Tank India

For the latest and more interesting financial news, keep reading Indiatimes Worth. Click her