Saturday, 15 February 2025

Startup/Business Terms

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
Formula: EBITDA = Revenue - Operating Expenses
Definition: Measures core business profitability before non-operating costs.

PAT (Profit After Tax)
Formula: PAT = Net Profit - Taxes
Definition: Net income after deducting taxes from profit.

CAC (Customer Acquisition Cost)
Formula: CAC = Sales & Marketing Expenses / New Customers
Definition: Cost of acquiring a single new customer.

HoReCa (Hotels, Restaurants, and Catering)
Definition: Industry category covering food & beverage businesses.

TAM (Total Addressable Market)
Definition: Maximum revenue opportunity for a product/service.

SAM (Serviceable Available Market)
Definition: The part of TAM a business can serve with its current offerings.

SOM (Serviceable Obtainable Market)
Definition: The realistic market share a company can achieve.

GMV (Gross Merchandise Value)
Formula: GMV = Total Sales Price of Goods
Definition: Total sales value of goods sold via a platform.

LTV (Customer Lifetime Value)
Formula: LTV = (ARPU × Gross Margin %) / Churn Rate
Definition: Expected revenue from a customer over their lifetime.

ARPU (Average Revenue Per User)
Formula: ARPU = Revenue / Total Users
Definition: Average revenue generated per customer.

Churn Rate
Formula: Churn Rate = (Lost Customers / Total Customers) × 100
Definition: Percentage of customers lost over a period.

Burn Rate
Formula: Burn Rate = Monthly Operating Expenses
Definition: The rate at which a company spends its cash reserves.

Runway
Formula: Runway = Cash Reserves / Burn Rate

Definition: Number of months a startup can operate before running out of money. 

Startup/Business Terms II

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