📖 Glossary

500 money, math, and health terms explained in plain English — each with an example and a free calculator.

40 terms found in Business & Sales. Clear filters

A

Accounts Payable Accounts payable (AP) is money a business owes to its suppliers or vendors for goods and services received on… Accounts Receivable Accounts receivable (AR) is money that customers owe a business for goods or services already delivered but… Average Order Value (AOV) Average order value (AOV) is the average amount customers spend per order over a period. AOV = total revenue…

B

Balance Sheet A balance sheet is a financial statement that shows what a company owns (assets), what it owes (liabilities)… Break-Even Point The break-even point is the level of sales at which total revenue exactly equals total costs, so there is… Burn Rate Burn rate is the pace at which a company spends its cash, usually expressed per month. It is a key measure…

C

Cash Flow Statement A cash flow statement is a financial statement that shows how cash moved into and out of a business during a… Cash Runway Cash runway is the number of months a company can keep operating before it runs out of cash, assuming its… Churn Rate Churn rate is the percentage of customers or subscribers who stop doing business with a company during a… Contribution Margin Contribution margin is the selling price of a product minus its variable costs. It shows how much each unit… Conversion Rate Conversion rate is the percentage of visitors or users who complete a desired action, such as making a… Cost of Goods Sold (COGS) Cost of goods sold (COGS) is the direct cost of producing or purchasing the goods a business sold during a… Customer Acquisition Cost (CAC) Customer acquisition cost (CAC) is the average amount a business spends to win one new customer, including… Customer Lifetime Value (CLV) Customer lifetime value (CLV or LTV) is an estimate of the total profit or revenue a business can expect from…

D

Dropshipping Dropshipping is a retail model in which a store sells products without keeping them in stock: when a customer…

E

EBITDA EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company’s…

F

Fixed Costs Fixed costs are business costs that do not change with the level of production or sales over a given period… Fulfillment Fee A fulfillment fee is a charge for storing, picking, packing, and shipping an order on a seller's behalf…

G

Gross Profit Gross profit is revenue minus the cost of goods sold (COGS): the direct costs of producing or buying the…

I

Income Statement An income statement, also called a profit and loss (P&L) statement, is a financial statement that shows a… Inventory Turnover Inventory turnover measures how many times a business sells and replaces its inventory during a period. It is… Invoice An invoice is a document a seller sends to a buyer requesting payment for goods or services provided. It…

K

Keystone Pricing Keystone pricing is a retail pricing practice in which the selling price is set at double the wholesale cost…

L

Late Payment Interest Late payment interest is interest charged on an overdue amount for the period it remains unpaid. It is common…

M

Marketplace Seller Fees Marketplace seller fees are the charges online platforms deduct from a seller's revenue for listing, selling… Markup Markup is the amount added to a product's cost to arrive at its selling price, usually expressed as a… Monthly Recurring Revenue (MRR) Monthly recurring revenue (MRR) is the predictable revenue a subscription business expects to receive every…

N

Net 30 Payment Terms Net 30 is a payment term on an invoice meaning the full amount is due within 30 days of the invoice date… Net Profit Margin Net profit margin is net profit expressed as a percentage of revenue, after all costs, including cost of…

O

Operating Expenses Operating expenses (OpEx) are the ongoing costs of running a business that are not part of the cost of goods…

P

Payment Processing Fee A payment processing fee is the charge a business pays to accept electronic payments, such as credit and… Profit Margin Profit margin is profit expressed as a percentage of revenue, showing how much of each unit of sales is kept…

R

Referral Fee In online marketplaces, a referral fee is a commission the platform charges on each sale, usually a… Retail Price The retail price is the price at which a product is sold to the final consumer. It includes the retailer's… Return on Ad Spend (ROAS) Return on ad spend (ROAS) measures the revenue generated for every unit of currency spent on advertising. It… Revenue Revenue is the total money a business receives from selling goods or services before any costs are…

U

Unit Economics Unit economics describes the revenue and costs associated with a single unit of a business, such as one…

V

Variable Costs Variable costs are costs that change in proportion to production or sales volume, such as raw materials…

W

Wholesale Price A wholesale price is the price a manufacturer or distributor charges retailers or other businesses that buy… Working Capital Working capital is the difference between a business’s current assets and current liabilities. It indicates…
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Definitions are for general educational purposes only and are not financial, tax, legal, or medical advice.