What is investment base?

In a sentence, investment base is an umbrella term used to reference the valuable portion, or net portion, of a pool of assets and liabilities. The reason we use the term “investment base” rather than “available assets,” is to avoid confusion when in contexts where the words “asset” and “liability” represent many ideas.

Why do we use “investment base” instead of “available assets”?

The reason we use the term “investment base” rather than “available assets,” is to avoid confusion when in contexts where the words “asset” and “liability” represent many ideas. After all, the sale of receivables, capital structuring, and valuations are all exchanges in which we repeat those words.

Why do investors want to “expand the base”?

The reason investors want to “expand the base” is to generate more absolute profit in the company per 1 dollar initial investment. For example, imagine you invest $10,000 in a watch company. With those $10,000, the company is able to generate $4000 per year in business.