Return on Investment (ROI)
Payback Period
Fixed Running Cost
Total Revenue
Cost of Goods
Gross Profit
Net Profit
Breakeven Point
Opex
Capex
1. Return on Investment (ROI)
ROI measures the efficiency of an investment by comparing the profit generated relative to its cost.
2. Payback Period
The payback period is the time taken to recover the initial investment from the cash inflows generated by the business.
3. Fixed Running Cost
These are costs that remain constant regardless of the business’s production or sales levels, like rent or salaries.
4. Total Revenue
The total income generated from selling goods or services before any costs are deducted.
5. Cost of Goods Sold (COGS)
COGS is the total cost directly tied to the production of the goods or services sold by the company. This includes materials, labor, and other direct costs.
6. Gross Profit
Gross profit is the difference between total revenue and the cost of goods sold (COGS). It shows how efficiently a company produces and sells its products.
7. Net Profit
Net profit is the remaining profit after all expenses (operating costs, taxes, interest, etc.) have been deducted from total revenue.
8. Breakeven Point
The breakeven point is the level of sales at which total revenue equals total costs, meaning there is neither profit nor loss.
9. Operating Expenses (OPEX)
OPEX refers to the ongoing expenses incurred during normal business operations, such as rent, utilities, and salaries.
10. Capital Expenditure (CAPEX)
CAPEX refers to funds used by a business to acquire, upgrade, or maintain physical assets like buildings, machinery, or equipment. It’s a long-term investment in the company’s future growth.
