C
Revenue
or gross income/net sales is the money generated from normal business operations, calculated as the average sales price times the number of units sold
Gross Profit
refers to the money a company earns after subtracting the costs associated with producing and selling its products
Gross profit=Net sales−COGS
Cash Flow
the movement of money into and out of a company over a certain period of time. If the company's inflows of cash exceed its outflows, its net cash flow is positive. If outflows exceed inflows, it is negative
Key Performance Indicators
often referred to as KPIs, measures a company’s success vs. a set of targets, objectives, or industry peers
Cash Basis Accounting
records revenue and expenses when cash related to those transactions is actually received or dispensed
Joel to offer examples
Prepaid Expense
are expenditures that are paid for in one accounting period but not completely used, consumed or benefits received until future accounting periods
Dividend
Dividends are the percentage of a company's earnings that is paid to its shareholders as their share of the profits. Dividends are generally paid quarterly, with the amount decided by the board of directors based on the company's most recent earnings
Accrual Basis Accounting
records revenue when earned and expenses when incurred regardless of when cash is exchanged
Joel to offer examples
Capital Expenditures (CapEx)
are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment
Operating Income
an accounting figure that measures the amount of profit realized from a business's operations after deducting operating expenses such as wages, depreciation, and cost of goods sold (COGS)
Earnings Per Share (EPS)
a measure of a company's profitability that indicates how much profit each outstanding share of common stock has earned. It's calculated by dividing the company's net income by the total number of outstanding shares.
The higher a company's EPS, the more profitable it is considered to be.
(Net Income − Preferred Dividends) / Outstanding Common Shares
Operating Expense (OpEx)
an expense that a business incurs through its normal business operations. Examples include:
-rent
-equipment
-inventory costs
-marketing
-payroll
Operating Margin
represents how efficiently a company is able to generate profit through its core operations. It is calculated by dividing a company’s operating income by its net sales
Operating Income / Net Sales
Share Buyback
when a company buys its own outstanding shares to reduce the number of shares available on the open market.
Customer Acquisition Cost (CAC)
the cost related to acquiring a new customer. Calculated as sales and marketing expenses divided by the number of new customers
(sales + marketing) / # of customers
Customer Lifetime Value (CLV)
a business metric used to determine the amount of money customers will spend on your products or service over time.
CLV = average order value × number of transactions × average length of the customer relationship (in years)