cash flow statement, Money coming in and going out of a business over a period, accruals, Costs recorded when they are incurred, not when paid, write‑off, Removing an uncollectible asset from the accounts, depreciation, The loss of value of an asset over time, revenue recognition, When a company officially records income, capital expenditure (CAPEX), Money spent on long‑term assets like equipment, operating expenditure (OPEX), Day‑to‑day operating costs, return on investment (ROI), The percentage return compared to the investment cost, cost‑benefit analysis, Comparing costs and benefits before making a decision, leverage, Using borrowed money to increase potential returns, variance analysis, Checking differences between planned and actual results, financial projection, An estimate of future financial performance, budget allocation, How a budget is divided across departments, run rate, A company’s expected annual performance based on current data, burn rate, How quickly a company spends its available cash, audit trail, A record of all actions taken in a system or process, internal controls, Processes that ensure accuracy and prevent fraud, risk mitigation, Actions taken to reduce risk, regulatory compliance, Following laws and industry rules, exposure, The amount of risk a company is vulnerable to.

Finance terms

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