Business Glossary

Unit economics shows whether each sale or customer makes you money. Learn the key formulas, see a worked meal prep example and how to improve your numbers.

Average order value is what customers spend per order. Learn the formula, see a worked online shop example and simple ways to raise it profitably.

Churn rate is the share of customers you lose each period. Learn the formula, see how 5% a month adds up for a small gym, and ways to reduce it.

Net Promoter Score measures how likely customers are to recommend you. Learn the formula, see a worked example and how to turn feedback into fixes.

The income statement, or P&L, shows whether your business made money. See each line explained, a worked print shop example and the checks that matter.

A balance sheet shows what your business owns, owes and is worth on one day. Learn the equation, see a worked bakery example and the ratios that matter.

Depreciation spreads the cost of equipment over the years you use it. Learn the straight-line formula, see a worked example and how it affects taxes.

Cash accounting records money when it moves. Accrual records it when it's earned. See the difference side by side, with a worked example and how to choose.

EBITDA shows how much your day-to-day operations earn before interest, taxes and depreciation. Here's the formula, a worked example and when it matters.

An invoice asks for payment. A receipt confirms it. See when to use each, a worked example, and what both documents should include.