The words on the dashboard, defined.
Plain definitions, why each number matters to an owner, and how it shows up in practice.
- Accrual vs cash accountingAccrual accounting records revenue when earned and costs when incurred, cash accounting when money moves, and a BC owner needs to read both
- Break-evenBreak-even is the level of sales at which contribution margin covers fixed costs, the point past which every extra sale in a BC business is profit
- Burn rate and runwayBurn rate is the cash a company loses each month and runway is how many months the bank balance lasts at that rate, the fundraising clock for BC startups
- CAC and paybackCustomer acquisition cost is what it takes to win one customer and payback is the months of contribution needed to earn it back, by channel in BC
- Cash conversion cycleThe cash conversion cycle is the days between paying for inputs and collecting from customers, the measure of how much cash growth consumes in BC
- Chart of accountsThe chart of accounts is the list of categories every transaction is coded to, which decides what your reports can tell you about a BC business
- Contribution marginContribution margin is revenue less every variable cost, including selling and serving, the amount each sale adds toward overhead in a BC business
- CovenantA covenant is a condition in a loan agreement a BC borrower must keep meeting, usually a financial ratio tested at set dates, with consequences if broken
- Days sales outstandingDays sales outstanding is the average days between invoicing a customer and being paid, the measure of how well a BC business collects its money
- EBITDAEBITDA is earnings before interest, taxes, depreciation and amortisation, the operating profit measure lenders and buyers apply to a BC company
- Gross marginGross margin is revenue less the direct cost of what you sold, in dollars or as a percentage, the first test of whether a BC business makes money
- Lifetime value (LTV)Lifetime value is the total contribution a customer produces over the time they stay with a BC business, which sets what you can spend to win them
- Rolling forecastA rolling forecast keeps the next twelve months in view, replacing each closed month with actuals and adding a new one, so BC owners plan from facts
- Thirteen-week cash flowA thirteen-week cash flow is a weekly forecast of cash in and out for the next quarter, reconciled to the bank, the tool BC owners steer by
- Working capitalWorking capital is current assets less current liabilities, the money a BC business needs to operate between paying for work and being paid for it
Start with a finance review.
Ninety minutes with Ali on your cash, margin and pricing. You leave with the four numbers to watch and the two or three moves that change them, whether or not we work together.