Business Finance Terms, Explained Simply.
Learn more about common financial terms here.
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Representations and warranties are the seller’s formal statements in a purchase and sale agreement about the accuracy and completeness of....
The real number is what a business actually earns under normal operating conditions; the tax number is the lower figure....
Revenue diversification is the distribution of a business’s income across multiple customers, products, services, and channels, reducing dependence on any....
Recurring revenue is income that renews predictably, through subscriptions, retainers, maintenance agreements, or contracts, without requiring the business to re-earn....
A readiness score is a structured, quantified assessment of how prepared a business is for an ownership transition, across the....
The range of value is the spread between the floor and ceiling of what a business is realistically worth, reflecting....
Risk tolerance in an exit planning context is the degree to which a business owner is willing to accept uncertainty,....
Retirement planning for business owners is the process of building the personal financial resources needed to sustain the owner’s lifestyle....
Runway is how long a business can continue operating at its current burn rate before its cash is exhausted, measured....
A rolling 13-week cash flow forecast projects cash receipts and payments week by week over the next quarter, updated continuously....
Refinancing is replacing an existing loan with a new one, typically to access better terms, extend the repayment period, consolidate....
Revenue recognition is the accounting principle that determines when a sale is officially recorded, not when the invoice is sent....