Definition - What does Financial Engineering mean?
This definition of financial engineering in the context of buying or selling a business is different than the traditional investment banking term, which refers to the creation of a new financial instrument by combining existing ones, and then putting up the new instrument for sale to investors.
Divestopedia explains Financial Engineering
The best antidote against financial engineering is the review of free cash flow rather than EBITDA. While EBITDA can be presented differently to suit the seller or buyer's needs, free cash flow is a number that cannot be changed with different accounting methods, and therefore is a better gage of a company's performance.
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