Financial dictionary

Skip the Jargon - Cassie provides a breakdown of key financial terms to help you master the language of finance. Use our free financial dictionary to understand key terms and concepts to make informed, confident decisions for your business.

a

Accounts Payable (AP)Accounts Receivable (AR)Accounts Receivable TurnoverAccrualsAddendumsAdjusted EBITDAAllowance for Doubtful AccountsAmendmentsAmortizationAmortization ExpenseAmortization ScheduleAngel InvestorAngel Investor Term SheetAnnual Contract Value (ACV)Annual Percentage Rate (APR)Annual Recurring Revenue (ARR)Anti-Takeover ProvisionsApplicable LawArbitrationAsset Purchase AgreementAsset Turnover RatioAssignment and Assumption AgreementAttainment PeriodAverage Revenue Per User (ARPU)Average Selling Price (ASP)

b

Bad Debt ExpenseBalance SheetBank LoanBase SalaryBasket and CapBenefits & Tax RatioBreach of ContractBreak-Up FeeBreakeven PointBusiness BrokerBusiness Continuity Plan (BCP)Business DataBusiness InsuranceBusiness PlanBusiness StrategyBusiness Valuation

c

C-CorporationCancellation FeeCapital Expenditure (CapEx)Capital ManagementCash AccountingCash FlowCash Flow StatementChange of Control ProvisionChart of AccountsChoice of ForumChoice of LawClawbackClick-Through Rate (CTR)Cliff VestingClosing ConditionsClosing DateClosing PeriodCo-signerCollateralCommission RateComp / Benefits RatioCompliance AuditConditions of the AgreementConfidential InformationConfidential Information Memorandum (CIM)Confidentiality AgreementConsumer DataContribution MarginConversion RateCopyrightCost MethodCost of Goods Manufactured (COGM)Cost of Goods Sold (COGS)Cost of SalesCounterpartsCovenantsCross-sell RateCurrent AssetsCurrent LiabilitiesCurrent RatioCustomer Acquisition Cost (CAC)Customer Acquisition TimeCustomer ChurnCustomer Retention Rate

d

Data PrivacyDeal FlowDeal Ramp TimeDeal Room/Data RoomDebentureDebt FinancingDebt RatioDebt Service Coverage RatioDebt-to-Equity RatioDeductible and LimitDeferred RevenueDeferred Tax AssetDeferred Tax LiabilityDemand GenerationDepreciationDepreciation ExpenseDepreciation ScheduleDirect CostsDisaster Recovery PlanDisclaimer of WarrantiesDisclosing PartyDiscount PercentageDiscounted Cash Flow (DCF)Dividend Payout RatioDown PaymentDrag-Along RightsDue DiligenceDue Diligence Period

e

EBITDAEarn-outEarnest MoneyEconomic Order Quantity (EOQ)Effective DateEfficiency RateEfficiency RatioEmergency FundEmployee EfficiencyEmployee ProductivityEmployee Retention RateEmployee Turnover RateEncumbranceEntire Agreement ClauseEquity FinancingEquity MethodEquity RatioEscrowEscrow AccountExclusivity AgreementExclusivity PeriodExecution DateExit StrategyExpense Ratio

f

Facilities & Office Spend / HeadFinancial AuditFinancial Documents/DataFinancial ForecastFinancial LeverageFinancial PlanFinancial RiskFinancial Statement MetricsFinancial StatementsFinancial StrategyFiscal YearFixed Asset TurnoverFixed-Term ContractsForce Majeure

g

General LedgerGo-Shop ClauseGoodwillGross MarginGross RevenueGrowth RateGuarantor

h

Headcount Ratio

i

Income StatementIndefinite ContractsIndemnificationIndemnified PartyIndemnifying PartyIndemnityIndemnity ClauseIndemnity PeriodIndirect CostsInitial Public Offering (IPO)Inspection RightsInstallment SaleIntangible AssetsIntegration PlanningIntellectual PropertyInterestInterest Coverage RatioInterest RateInventory ObsolescenceInventory ShrinkageInventory TurnoverInvestments

j

Just-In-Time (JIT) Inventory

k

Key Performance Indicators (KPIs)Kicker

l

LTV/CAC RatioLead Conversion RateLead GenerationLetter Of Intent (LOI)LiabilitiesLifetime Value (LTV)Limitation of LiabilityLine of CreditLiquidationLiquidityLiquidity RatioLitigationLoansLock-Up PeriodLong-Term AssetsLong-Term Liabilities

m

Management FeeMarginMarket ValueMarketing FunnelMarkup PercentageMaterial Adverse Change (MAC)Material Adverse Effect (MAE)Median Selling PriceMediationMezzanine FinancingMonthly Recurring Revenue (MRR)Monthly/Annual run rateMultiple

n

Net Book ValueNet IncomeNet Present Value (NPV)Net Profit MarginNo-Shop Clause / ExclusivityNon-Compete AgreementNon-Disclosure Agreement (NDA)Non-Disclosure ExpirationNon-Financial MetricsNon-Solicit AgreementNoticeNovation Agreement

o

OTE (On-Target Earnings)Onboarding DurationOperating Cash Flow (OCF)Operating Expense Ratio (OER)Operating IncomeOperating LeverageOperating MarginOperational Expenditure (OpEx)Option PeriodOther Contractual ProvisionsOverhead CostsOverhead RateOwner's BasisOwner's Capital ContributionsOwnership Rights

p

PatentsPersonal InsurancePersonal RightsPersonally Identifiable Information (PII)Physical PropertyPipelinePost-Closing AdjustmentPrepaid ExpensesPrincipalPrivacy PolicyProduct Development CycleProductivity RateProfitProfit per EmployeeProfit per Square FootPublic InformationPurchase AgreementPurchase Price Adjustment

q

Quick Ratio

r

Real Estate AgentReceiving PartyReinvesting ProfitsReleaseRenewalReporting PeriodRepresentation and Warranties InsuranceRepresentations and WarrantiesRetained EarningsRetentionRetention RatioReturn On Ad Spend (ROAS)Return on Assets (ROA)Return on Equity (ROE)Return on Investment (ROI)RevenueRevenue ChurnRevenue Retention RateRevenue per EmployeeRevenue per Square FootReverse Termination FeeRight Of First Refusal (ROFR)Right of First Offer (ROFO)Risk Management

s

S-CorporationSales AcceleratorSales Cycle LengthSales FunnelSales TaxSalesperson ROISalesperson Ramp TimeSandbaggingSecured LoanSellers NoteSensitive InformationSeverability ClauseShareholder RightsSignature DateSolvencySolvency RatioStakeholder RightsStandalone ValueStock Purchase AgreementStraight SaleStrategic PlanningSubsidiary LedgerSuccession PlanSuccessor and AssignsSurvival PeriodSynergy

t

Tactical PlanningTag-Along RightsTangible AssetsTechnology Spend / HeadTerm / DurationTerm LoanTerm SheetTerm of the AgreementTermination FeeTerms and ConditionsTime to LiveTime to Market (TTM)Time to OnboardTotal Asset TurnoverTotal CompensationTotal Contract Value (TCV)Total Operational Cost per HeadTrademarksTraditional File SharingTraditional LoansTraining Costs / HeadTraining DurationTrust Account

u

Unsecured LoanUpsell RateUse Of MarksUtilization Rate

v

Value-Added Tax (VAT)Variable / Fixed Compensation SplitVariable OTE (On Target Earnings)Venture CapitalVenture Capitalist Term SheetVesting PeriodVoting Rights

w

WaiverWarningWarranty Period in M&AWorking Capital
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