Financial glossary
Find definitions of key terms in corporate finance, financial management and cash management.
Working Capital
The difference between your short-term liabilities (suppliers, salaries) and short-term assets (customer receivables, inventory). High working capital means you need more cash to operate.
Cash Burn
The average monthly amount of cash your company spends. Cash burn indicates how long you can operate with current cash before raising funds.
CAC (Customer Acquisition Cost)
The average cost to acquire one customer. Calculated by dividing your marketing spend by the number of customers acquired.
LTV (Lifetime Value)
Total revenue expected from a customer over their lifetime. The higher your LTV, the more you can afford to spend on acquisition.
Term Sheet
Non-binding document outlining the principal terms of an investment (amount, valuation, voting rights, liquidation preferences).
Cap Table (Capitalization Table)
Table showing your company's ownership structure: who owns how many shares (founders, investors, employees with options).
Runway
Number of months you can operate with current cash before running out of money.
MRR (Monthly Recurring Revenue)
Predictable monthly revenue from subscriptions or recurring contracts. The foundation metric for SaaS and subscription models.
Retention Rate
Percentage of customers who remain active after a given period (typically calculated monthly or annually).
EBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortization. Profit before financial and accounting deductions.
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