Finance
Metrics, formulas, reports, and cash decisions that shape business health.
Runway
The number of months a company can continue operating at its current spending rate before running out of cash.
Burn rate
The rate at which a company spends its cash reserves, typically measured on a monthly basis.
LTV
The total revenue or profit a business expects to earn from a single customer throughout their entire relationship with the company.
Gross margin
The percentage of revenue a business retains after subtracting the direct costs of producing its goods or services.
P&L
A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time.
Cash flow
The net amount of cash and cash equivalents being transferred into and out of a business during a specific period.
Overhead
The ongoing administrative and operational costs required to run a business that are not directly tied to producing goods or services.
ROI
A financial metric used to evaluate the efficiency or profitability of an investment relative to its cost.
Break-even point
The point at which total revenue equals total costs, resulting in neither profit nor loss.
Revenue
The total amount of money a business brings in from selling its products or services before any expenses are deducted.
COGS
The direct costs of producing the goods or services sold by a business, including raw materials and direct labor.
Gross Profit
The money a business makes after subtracting the direct costs of producing its products or services.
Net Profit
The actual profit of a business after all operating expenses, interest, taxes, and direct costs are subtracted from total revenue.
LTV:CAC
A ratio that compares the lifetime value of a customer to the cost of acquiring that customer.
MRR
The predictable revenue a subscription-based business expects to receive every month.
ARR
The predictable revenue a subscription-based business expects to receive over a full year.
Churn
The rate at which customers cancel their subscriptions or stop doing business with a company over a specific period.
NRR
A metric that measures the percentage of recurring revenue retained from existing customers over a period, including expansion and downgrades.