Financial terms, explained for business decisions.

Accounts Payable

Accounts payable is the amount a business owes suppliers or vendors for goods and services already received on credit.

Accounts Receivable Aging

Accounts receivable aging groups unpaid customer balances by the time elapsed since the invoice date or due date.

Advance Tax

Advance tax is a tax payment made before the final annual liability is determined, when the applicable jurisdiction requires it.

Annual Recurring Revenue (ARR)

Annual recurring revenue is the annualized value of recurring contract revenue at a point in time.

Bank Statement

A bank statement is a bank-issued record of an account's transactions and balances over a stated period.

Bill of Materials

A bill of materials is a structured list of the components and quantities required to produce a finished item.

Board Deck / Investor Update

A board deck or investor update presents selected business context, financial results and decisions to a specific stakeholder audience.

Break-Even Point

Break-even is the point where a defined measure of revenue or contribution covers the costs included in the same analysis.

Bridge Round

A bridge round is interim financing intended to carry a company to a defined milestone, financing event or operating position.

Budget

A budget is a financial plan for a defined period that expresses expected or authorized revenue, spending, resource use and other targets based on stated assumptions.

Budget Variance

Budget variance is the difference between a budgeted amount and the corresponding actual result for the same period and scope.

Budget vs Actual

Budget vs actual is a review process that compares planned amounts with corresponding recorded results for the same period and organizational scope.

Burn Efficiency

Burn efficiency is an umbrella concept for assessing how effectively a business converts cash consumption into relevant operating, growth or milestone progress.

Burn Multiple

Burn multiple is a recurring-revenue efficiency ratio that compares net burn with net new annual recurring revenue over the same period.

Burn Rate

Burn rate describes how quickly a business is using cash over a defined period under a stated gross or net methodology.

CAC Payback Period

CAC payback period estimates how long customer gross profit or contribution takes to recover the acquisition cost for a defined customer or cohort.

Cap Table

A capitalization table is a record or model of a company’s equity ownership and securities across relevant holders.

Capital Allocation

Capital allocation is the decision process for distributing available financial resources among competing uses in pursuit of objectives and within constraints.

Cash Conversion Cycle

The cash conversion cycle estimates how many days operating cash is tied up between paying for operating inputs and collecting cash from customers.

Cash Flow

Cash flow is the movement of cash and cash equivalents into and out of a business over a defined period.

Cash Flow Positive

A business is cash-flow positive over a defined period when the relevant cash inflows exceed the relevant cash outflows for that period.

Cash Flow Statement

A cash flow statement is a period-based financial statement that reconciles beginning cash to ending cash through operating, investing, and financing cash flows.

Cash Position Forecast

A cash position forecast is a forward-looking path from a defined starting cash position through expected inflows and planned or committed outflows over a stated horizon.

Cash-Out Date

A cash-out date is the modeled date on which available cash reaches a defined floor under a stated set of timing and operating assumptions.

Change Order

A change order is a documented modification to an existing construction agreement that can alter scope, price, schedule, responsibilities, or other contract terms.

Churn Rate

Churn rate is a family of period-based measures for the customers or recurring revenue lost from a defined starting base.

Cohort Retention

Cohort retention measures how much of a defined customer, user, or recurring-revenue cohort remains at comparable ages after a shared starting event.

Collection Speed

Collection speed is a RunwayCal planning metric for elapsed time between a defined commercial event and the first recorded receipt tied to that context.

Committed MRR

Committed MRR is a non-standardized recurring-revenue measure: the monthly recurring value that satisfies an organization’s stated commitment and inclusion policy.

Connected Cash Flow

Connected Cash Flow is RunwayCal’s design concept for linking cash, revenue, commitments, team, budget, and scenario context through shared logic while preserving each financial state.

Cost of Goods Sold

Cost of goods sold, or COGS, is the cost assigned to inventory or products sold during a reporting period under the organization's accounting policy.

Cost of Goods Sold (COGS)

Cost of goods sold is the cost assigned to inventory or goods that were sold during a reporting period under the organization’s accounting policy.

CSV (Comma-Separated Values)

CSV is a plain-text format for tabular data in which records are typically rows and fields are separated by a delimiter, most commonly a comma.

Customer Acquisition Cost (CAC)

Customer acquisition cost is the acquisition spending attributed to a defined group of new customers divided by the number of customers acquired.

Data Extraction

Data extraction is the process of retrieving selected information from a source so it can be reviewed, transformed, analyzed, or loaded into a downstream system.

Deadhead Miles

Deadhead miles are miles traveled by a commercial vehicle without a revenue-generating load, such as repositioning after delivery or traveling to the next pickup.

Deal Risk Score

Deal Risk Score is a RunwayCal-specific rules-based diagnostic that combines supported payment-speed, revenue-concentration, and outstanding-exposure inputs into review context.

Default Alive

A startup is default alive when, under a stated model of cash, spending, revenue trajectory, and other assumptions, it is projected to reach profitability before running out of cash.

Default Dead

A startup is default dead when, under a stated model and assumptions, it is projected to run out of cash before reaching profitability unless something material changes.

Deferred Revenue

Deferred revenue is consideration received or receivable for goods or services that have not yet been recognized as revenue because the related performance obligation has not been satisfied.

Department Budgeting

Department budgeting is the process of planning, allocating, and monitoring financial resources by function, team, cost center, or department.

Deterministic Finance

Deterministic finance means a defined set of financial inputs and explicit calculation rules produces a reproducible result that can be traced back to those inputs.

Dilution

Equity dilution is the reduction in an existing holder's percentage ownership when total shares or ownership interests increase and the holder does not acquire enough of the new issuance to maintain the same percentage.

Down Round

A down round is an equity financing in which the company's valuation or share price for the new round is lower than the comparable valuation or share price used in a prior financing.

Draw Schedule

A draw schedule is a planned sequence or framework for requesting and releasing construction project funds as milestones, work progress, costs, or contractual conditions are met.

EBITDA

EBITDA means earnings before interest, taxes, depreciation, and amortization. It is a non-GAAP and non-IFRS performance measure whose definition and adjustments can vary.

Financial Alert

A financial alert is a signal that a defined financial condition has been met and may need review.

Financial Consolidation

Financial consolidation combines financial information from multiple entities, business units, or locations into a group view, with normalization, adjustments, or eliminations applied when the reporting purpose requires them.

Financial Insight

A financial insight is a traceable observation that explains what changed, why it may matter, or what deserves review in financial context.

Financial Model

A financial model is a structured representation of a business's financial relationships and assumptions, used to estimate how changes in key drivers may affect future outcomes.

Financial Operating System

A financial operating system is positioning language for a connected operating layer that brings financial inputs, planning logic, scenarios, reporting context, and decision workflows together around a shared model.

Financial Snapshot

A financial snapshot is a point-in-time selection of financial measures assembled to answer a defined review question.

Fiscal Year

A fiscal year is an organization's annual financial reporting period, which may follow the calendar year or use a different year-end and, in some cases, a 52-week or 53-week calendar.

Forecast Accuracy

Forecast accuracy describes how closely forecast values match corresponding actual results under a stated error measure, scope, and time horizon.

FP&A

FP&A, or financial planning and analysis, is the finance discipline that connects planning, forecasting, budgeting, performance review, scenarios, and decision support.

Free Cash Position

Free Cash Position is a legacy RunwayCal glossary label retained for historical and search context; the current product metric is True Cash Position.

Freight Factoring

Freight factoring is a form of accounts-receivable financing in which a carrier sells or assigns eligible freight invoices to a factor in exchange for earlier cash, subject to fees and contract terms.

Goods and Services Tax (GST)

GST is a consumption or value-added tax used in multiple jurisdictions, with rates, registration thresholds, credits, filing rules, and terminology determined by local law.

Gross Burn Rate

Gross burn rate is the cash a business spends during a defined period before subtracting cash inflows, measured under a stated inclusion policy.

Gross Margin

Gross margin is gross profit expressed as a percentage of revenue after subtracting cost of goods sold or cost of revenue under a defined accounting policy.

Headcount Planning

Headcount planning is the process of deciding which roles the business may need, when they may start, what they may cost, and how those choices fit the operating plan.

Hiring Plan

A hiring plan is a governed schedule of intended or approved roles, ownership, status, target start dates, and compensation assumptions.

Insurance Reimbursement

Insurance reimbursement is payment from an insurer or payer to a healthcare provider after covered services and a claim are processed under the applicable contract and payer rules.

Investor Report

An investor report is a periodic communication that combines selected financial and operating results with context, progress, risks, and a forward view for investors.

Key Performance Indicator (KPI)

A key performance indicator is a metric selected because it represents progress toward a defined objective over a stated period.

Lifetime Value (LTV)

Lifetime value estimates the value attributed to a customer relationship under a stated revenue, gross-profit, or contribution convention.

LTV:CAC Ratio

The LTV:CAC ratio compares a defined customer lifetime value estimate with the acquisition cost for a compatible customer population.

Milestone Billing

Milestone billing is a contractual invoicing method in which an invoice becomes eligible when a defined project event, deliverable, approval, or progress condition is met.

Monthly Burn

Monthly burn describes cash consumed during a month under a stated gross-burn or net-burn convention.

Monthly Recurring Revenue (MRR)

Monthly recurring revenue is recurring subscription revenue normalized to a monthly amount under a consistent company policy.

Multi-Entity Finance

Multi-entity finance manages financial information across two or more distinct legal or reporting entities while preserving each entity and the adjustments needed for a group view.

Net Burn

Net burn is the amount of cash consumed over a period after relevant realized cash inflows are subtracted from defined cash outflows.

Net Income

Net income is the accounting profit or loss remaining after recognized revenue, expenses, interest, taxes, and other applicable items for a reporting period.

Operating Expenses (OpEx)

Operating expenses are costs recognized for running the business that are not classified as cost of goods sold, cost of revenue, or capitalized assets under the applicable accounting policy.

Operational Runway

Operational runway is a RunwayCal planning concept for the operating room visible after supported cash, known obligations, burn, and timing are considered together.

P&L (Profit and Loss Statement)

A profit and loss statement, also called an income statement, reports recognized revenue, costs, expenses, and profit or loss for a defined period.

Payment Terms

Payment terms are contractual conditions that state when and how an amount becomes due, including the due-date convention, currency, method, discounts, penalties, or other agreed requirements.

PDF (Portable Document Format)

PDF is a fixed-layout document format designed to preserve the appearance of text, tables, images, and pages across systems.

Post-Money Valuation

Post-money valuation is the agreed company valuation immediately after a financing under the capitalization convention used for that round.

Pre-Money Valuation

Pre-money valuation is the agreed company valuation immediately before new investment under the capitalization convention used for a financing.

Production vs Collection

In a healthcare or dental practice, production records the value of services or procedures under the practice’s operating convention, while collections record cash received.

Profit and Loss Statement (P&L)

A profit and loss statement, also called an income statement, reports recognized revenue, costs, expenses, applicable gains or losses, and profit or loss for a defined period.

Progress Billing

Progress billing is periodic invoicing based on completed work or another contractual measure of progress rather than waiting for the entire project to finish.

Retainage

Retainage is a contractually withheld portion of an otherwise eligible payment that is held until specified release conditions are met.

Retainer

A retainer is a contractual arrangement for ongoing access, reserved capacity, or recurring services under agreed scope, billing, and usage terms.

Revenue

Revenue is consideration earned from providing goods or services during a period under the applicable accounting basis and recognition policy.

Revenue Concentration

Revenue concentration measures how much revenue over a stated period and basis depends on one customer, customer group, product, channel, geography, or another defined source.

Revenue Model

A revenue model describes how a business earns revenue, including who pays, what they receive, how price is set, how transactions or contracts recur, and which revenue streams result.

Runway Compression

Runway compression is a reduction in expected runway caused by changes in cash, spending, obligations, receipt timing, or the assumptions used in the cash path.

Runway Extension

Runway extension means increasing the modeled time before a defined cash position reaches its stated floor.

Scenario Analysis

Scenario analysis evaluates the financial implications of coherent alternative assumption or event sets against a shared baseline.

Scenario Planning

Scenario planning designs plausible alternative futures, identifies the assumptions and events behind them, evaluates their implications, and prepares decision options or actions.

Seed Funding

Seed funding is an early financing stage used to help a company develop its product, team, market, and operating evidence before a later financing or self-sustaining milestone.

Series A

Series A is a named financing round often raised after seed to support scaling once a company has developed meaningful operating evidence, although structure, size, investors, and timing vary.

Shortfall Detection

Shortfall detection identifies a future point where a projected available-cash path falls below an explicitly defined threshold.

Startup Runway

Runway estimates how long a defined cash position can support the business before reaching a stated cash floor under a defined net cash-consumption assumption or modeled cash path.

Statement of Work

A statement of work, or SOW, is a project document that commonly defines scope, deliverables, responsibilities, schedule, acceptance, assumptions, commercial terms, and payment terms.

Stripe

Stripe is a third-party payments and billing technology platform whose available capabilities depend on the Stripe products and configuration a business uses.

Subscription Revenue

Subscription revenue is revenue earned from providing continuing access to a product or service under a subscription arrangement.

Tax Obligation

A tax obligation is an amount required to be paid to a tax authority under applicable law for a specific taxpayer, tax type, jurisdiction, and period.

TDS (Tax Deducted at Source)

Tax Deducted at Source, or TDS, is an Indian withholding-tax mechanism under which a payer may need to deduct tax from specified payments and remit it under applicable Income-tax rules.

True Cash Position

True Cash Position helps you see your cash together with the known obligations that may already need it.

Unit economics describes the revenue, direct or variable cost, and contribution or profitability associated with a clearly defined unit of activity.