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Account mapping

The process of linking or aligning accounts in one system with corresponding accounts in another system, ensuring consistency and accuracy in financial reporting.

Advance payments

Amounts received by a company before delivering goods or services.

Allowances, discounts, rebates

Reductions in the selling price of goods or services, typically offered to customers for various reasons such as volume purchases or early payment.

Balance sheet (BS)

A financial statement that provides a snapshot of an organization's financial position, showing its assets, liabilities, and equity at a specific point in time.

Capital expenditure (capex)

Spending by a company on physical assets like property, plants, and equipment, with benefits expected to extend beyond one year.

Capitalized work

Costs associated with work that has been converted into a capital asset rather than being expensed immediately.

Cash & cash equivalents

Readily available funds and short-term, highly liquid investments.

Cash conversion cycle (CCC)

A financial metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. It includes days inventory outstanding (DIO), days sales outstanding (DSO), and days payable outstanding (DPO).

Cash flow from financing

The cash generated or used by a company's financing activities.

Cash flow from investing

The cash generated or used by a company's investment activities.

Cash flow from operations

The cash generated or used by a company's core operating activities.

Cash flow statement (CF)

A financial report that provides a summary of a company's cash inflows and outflows over a specific period. It is divided into three sections: operating activities, investing activities, and financing activities.

Cash runway

The estimated amount of time a company can operate with its existing cash reserves before running out of funds. A crucial metric for assessing financial sustainability.

Change in inventories

The difference in the value of a company's inventory at the beginning and end of a specified period.

Changes in cash

The net increase or decrease in a company's cash position during a specific period.

Consolidation

The process of combining financial data from different departments or subsidiaries into a single, comprehensive set of financial statements.

Contribution margin (CM)

The value of revenue that remains after subtracting variable costs associated with producing goods or providing services. Can be divided into multiple levels reflecting different stages of cost deduction.

Current assets & accruals

Cash and assets expected to be converted into cash within one year.

Data visualization

The representation of financial data through charts, graphs, and other visual elements to make complex information more understandable and actionable.

Depreciation & amortization (D&A)

Depreciation accounts for the wear and tear on physical assets, while amortization deals with the expense of intangible assets over time.

DIO (days inventory outstanding)

Measures the average number of days it takes for a company to sell its entire inventory. A crucial metric for inventory management and turnover.

DPO (days payable outstanding)

Measures the average number of days a company takes to pay its suppliers after a purchase has been made. An indicator of how well a company manages its accounts payable.

DSO (days sales outstanding)

Measures the average number of days it takes for a company to collect payment after a sale has been made. A key metric for assessing accounts receivable efficiency.

EBIT (Earnings Before Interest and Taxes)

A measure of a company's profitability, representing its earnings before deducting interest and taxes.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

A measure of operating performance that excludes interest, taxes, depreciation, and amortization, providing a clearer view of a company's profitability.

EBT (Earnings Before Tax)

A measure of profitability before deducting taxes.

Equity

The residual interest in the assets of a company after deducting liabilities.

Equity & reserves

The ownership interest and accumulated earnings of a company.

Equity ratio

A financial metric that measures the proportion of a company's total assets financed by equity. Calculated by dividing shareholders' equity by total assets.

Financial assets

Assets that are readily convertible into cash, such as stocks or bonds.

Financial liabilities

Obligations (including loans or bonds) to pay cash or other financial assets.

Financial modeling

The creation of mathematical representations (models) of financial processes or systems to analyze and make predictions about financial performance.

Financial planning and analysis (FP&A)

A business process that encompasses the budgeting, forecasting, and analytical processes within an organization to support strategic decision-making.

Fixed assets

Long-term, tangible assets essential for a company's operations.

Free cash flow (FCF)

The cash flow from a company's operations minus investment activities.

IC liabilities

Intercompany liabilities - amounts owed by a company to its subsidiaries or affiliated companies within the same corporate group.

IC receivables

Intercompany receivables - amounts owed by subsidiaries or affiliated companies within the same corporate group.

Intangible assets

Non-physical assets, such as patents or trademarks, with a finite useful life.

Inventory

The goods and materials a company holds for production or sale.

KPI (Key Performance Indicator)

Quantifiable metrics that help assess the performance of a business in achieving its strategic objectives.

Liabilities & deferrals

The obligations and deferred income of a company.

Maintenance

The expenses associated with keeping assets and equipment in working condition.

Management financial statement design (FSD)

Structuring financial statements in a way that is tailored to the informational needs of management, facilitating decision-making and strategic planning.

Material costs

The direct costs associated with the production of goods.

Net debt

Calculated by subtracting a company's total cash and cash equivalents from its total financial debt. It provides an indication of a company's overall debt position.

Net income

The final profit or loss after all expenses and taxes have been deducted from revenues.

Net interest

The difference between interest earned and interest paid by a company.

Net working capital (NWC)

A financial metric that measures the difference between a company's current assets and current liabilities, focusing on elements directly related to core operations such as trade receivables, inventory, trade payables, and advance payments.

Non recurring items

One-time expenses or income that are not expected to reoccur.

Occupancy costs

The expenses associated with maintaining and operating physical spaces.

Opex (operating expenses)

The costs associated with a company's day-to-day operations, such as rent, utilities, and salaries.

Opin (operating income)

A company's profit from its core operations, calculated by subtracting operating expenses from operating revenues.

Order book

A record of all orders for a company's products or services that have been confirmed by customers but have not yet been fulfilled or delivered.

Other direct costs

Additional direct costs that don't fall into the categories of material costs or purchased services.

Other income / loss

Any income or losses not directly related to the core business operations.

Other operating expense

Various indirect expenses not specified in a category.

Other operating income

Income generated by a company's core operations but not derived from its primary products or services.

Other special reserves

Specific reserves set aside for special purposes beyond typical business operations.

Other working capital (OWC)

Components of working capital beyond the core elements, such as trade receivables, trade payables, and inventory.

Output

All value creation activities of a company including revenues, capitalized work, and changes in inventories.

Pension provision

An amount set aside to cover future pension obligations to employees.

Personnel expense

All costs associated with employees, including salaries, benefits, and other related costs.

PPE (property, plant, and equipment)

Long-term assets such as buildings and machinery used in the production process.

Profit and loss statement (P&L)

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, resulting in the net profit or loss.

Profit/loss carryforward

The amount of a company's net income or loss that is carried forward from previous years and not distributed as dividends.

Provisions

Liabilities or obligations for which the amount is uncertain, set aside based on estimates.

Purchased services

The direct costs associated with services bought from external providers.

Rent & leasing

Costs associated with renting or leasing properties and equipment.

Retained earnings

The cumulative earnings for the year-to-date.

Revenue class segmentation

Categorizing a company's revenue into distinct classes or categories based on various criteria, such as product lines, geographic regions, or customer segments.

Revenues

The total income generated by a company from its primary operations. It includes sales, fees, and any other income related to the core business.

Rolling forecast

An ongoing forecasting approach where the forecast is regularly updated as new data becomes available, typically extending the forecast period by one month or one quarter.

Scenario planning

The process of creating and analyzing different scenarios to understand the potential impact of various factors on the organization's financial performance.

Selling expense

Costs directly related to the selling of products or services, such as sales commissions.

Sensitivity analysis

The study of how changes in certain variables impact the outcome of a financial model or decision.

Tax expense

The total amount of taxes a company is required to pay.

Tax provision

An estimate of the amount of tax a company expects to pay in a given period.

Trade payables (or accounts payable)

Amounts owed by a company to its suppliers for goods or services.

Trade receivables

Amounts owed to a company by its customers for goods or services.

Variance analysis

The examination of the differences between planned financial outcomes (budget) and actual results to identify and understand the reasons for variations.

What-if analysis

The examination of the potential impact on financial outcomes by changing one or more variables in a financial model.

Working capital

The difference between a company's current assets and current liabilities, representing its ability to cover day-to-day operations. It includes trade receivables, inventory, and trade payables.

YTD

Year to date - the period from the beginning of the current calendar or fiscal year up to the present date.