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Home Resources M&A Glossary Absentee Owner

M&A Glossary

Absentee Owner

A business owner who is not personally involved in the management or operations of a business.

Tips

The application of this term varies; some refer to business owners as absentee owners if they spend a minimal amount of time in the business, while others reserve this definition for when a business owner has no involvement at all. Absentee owners are more vulnerable to theft by employees unless proper internal controls are implemented in the business.

Related M&A Terms

Accounting Method

The method that is used to record a business's revenue and expenses for tax purposes. See Also Cash basis , accrual basis. Tips Most businesses use a hybrid of the...

Accounting Period

The period of time in which financial activity is recorded and financials are prepared. Tips Normally refers to a 12-month period. The two primary accounting periods are fiscal and calendar...

Accrual Method of Accounting/Accrual Basis

One of the two primary accounting methods, recognizes income and expenses based on when they are "accrued" or when they actually occur. Example If a job was awarded today but...

Add-Backs

An adjustment made to the income or expenses in a financial statement when calculating the true earnings capacity of a business (i.e., SDE or EBITDA). See Also Normalize, SDE, EBITDA....

Add-on Acquisition

The purchase, or acquisition, of a smaller company that is added on to a larger platform company by a private equity firm or strategic buyer, to compliment the acquirer’s business...

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