A practical financial glossary.
Short definitions, explicit distinctions and a calculator to explore each idea.
- CAC
- Customer acquisition cost: selected marketing and sales expenses per new customer.
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- Contribution margin
- Selling price less variable costs, as an amount or percentage of price.
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- Food cost percentage
- Food used at cost divided by food sales for the same period.
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- LTV
- An estimate of lifetime customer value. Revenue and contribution definitions differ.
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- Net revenue retention
- Revenue kept from an existing cohort after expansion, contraction and churn.
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- Operating margin
- Operating income as a percentage of revenue, before interest and tax.
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- ROAS
- Attributed advertising revenue divided by advertising spend. It is not profit.
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- ROI
- Net gain relative to total investment; simple ROI does not account for timing.
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- Runway
- The modeled time until available cash is depleted under the stated burn assumptions.
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- Safety stock
- Inventory held as a buffer against uncertainty, under a stated demand model.
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- Working capital
- Current assets minus current liabilities at a balance-sheet date.
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