Financial Glossary.
Accounting terminology explained in plain English. Because you shouldn't need a degree to understand your bank balance.
Accounts Payable
Money owed by a business to its suppliers shown as a liability on a company's balance sheet.
Accounts Receivable
Money owed to a company by its debtors.
Burn Rate
The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations.
COGS (Cost of Goods Sold)
The direct costs of producing the goods sold by a company.
EBITDA
Earnings before interest, taxes, depreciation, and amortization—a measure of a company's overall financial performance.
Gross Margin
Net sales minus the cost of goods sold, divided by net sales, expressed as a percentage.
Net Profit
The actual profit after working expenses not included in the calculation of gross profit have been paid.
Runway
How long your business can survive with its current cash balance if no more revenue comes in.
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