Financial Reporting Glossary

Break-Even Analysis

A calculation to determine the point at which total revenue equals total costs, meaning the business is neither making a profit nor a loss.

Cash Flow Forecast

A financial estimate of future cash inflows and outflows over a specific period, used to predict liquidity and ensure the business can meet its obligations.

Budget vs Actual

A comparison between the budgeted (planned) financial figures and the actual results, used to analyze performance and variances.

Financial Projections

Estimates of a company’s future financial performance, including income, expenses, and profitability, used for planning and investment decisions.

Financial Statements

Reports that summarize a company’s financial performance, including the balance sheet, income statement, and cash flow statement. Read more about Financial Statements

Variance Analysis

The process of comparing actual financial outcomes to budgeted or expected figures and analyzing the reasons for the differences (variances). Read more about Variance Analysis

Income Projection

A forecast of the income a business expects to generate over a specific period, helping with financial planning and goal setting.

Financial KPIs

Key Performance Indicators that measure a company’s financial health and performance, such as profit margin, return on investment (ROI), and revenue growth.

Earnings Report

A financial statement issued by a company to show its profitability and financial performance for a specific period, typically quarterly or annually.

Monthly Recurring Revenue (MRR)

The predictable income a business generates each month from subscription-based products or services, is used to measure revenue stability. Read more about Monthly Recurring Revenue

Annual Recurring Revenue (ARR)

The yearly equivalent of Monthly Recurring Revenue (MRR), shows the total predictable revenue a business generates from subscription-based services over a year. Read more about Annual Recurring Revenue

Churn Rate

The percentage of customers who stop using a company’s product or service during a given time period, often used to assess customer retention.

Customer Acquisition Cost (CAC)

The total cost of acquiring a new customer, including marketing, sales, and other related expenses, used to measure the efficiency of customer acquisition efforts. Read more about Customer Acquisition Cost (CAC)

Lifetime Value (LTV)

The total revenue a business expects to generate from a customer throughout their entire relationship with the company, used to assess customer profitability. Read more about Lifetime Value

Conversion Rate

The percentage of users or visitors who complete a desired action, such as making a purchase or signing up for a service, out of the total number of visitors.

User Retention

A measure of how well a company retains its customers over time, often expressed as a percentage of users who continue to use a product or service.

Subscription Model

A business model where customers pay a recurring fee (monthly or annually) to access a product or service, often used in SaaS businesses.

Regulatory Compliance

The act of ensuring that a business adheres to laws, regulations, and guidelines relevant to its industry, such as financial reporting or privacy standards.

Data Privacy Compliance (GDPR, CCPA)

Adherence to laws and regulations that protect personal data, such as the General Data Protection Regulation (GDPR) in the EU and the California Consumer Privacy Act (CCPA) in the U.S.

Audit Trail

A detailed record of all transactions or activities in a system used to track changes and ensure transparency for audits or reviews.