Annual Contract Value
Annual contract value, or ACV, is the recurring revenue value of a customer contract normalized to one year.
Glossary
Clear definitions for finance, SaaS, valuation, and profitability terms used across CalcMastery benchmarks and calculators.
CAC Payback Period
CAC payback period measures how long it takes to recover customer acquisition cost from gross-margin-adjusted revenue.
Capital Expenditure
Capital expenditure, or CapEx, is spending on long-lived assets such as equipment, facilities, software, and infrastructure.
Cost of Goods Sold
Cost of goods sold, or COGS, includes the direct costs required to produce or deliver revenue.
Customer Acquisition Cost
Customer acquisition cost, or CAC, measures the sales and marketing cost required to acquire a new customer.
EBITDA Margin
EBITDA margin measures EBITDA as a percentage of revenue before interest, taxes, depreciation, and amortization.
EV/EBITDA
EV/EBITDA compares enterprise value to EBITDA and is a common valuation multiple for profitable companies.
EV/Revenue
EV/Revenue compares enterprise value to revenue and is often used when earnings are negative or not mature.
Free Cash Flow
Free cash flow measures cash generated after operating needs and capital expenditures.
Gross Revenue Retention
Gross revenue retention measures retained recurring revenue before expansion.
Net Income
Net income is profit after all expenses, including operating costs, interest, taxes, and non-operating items.
Net Revenue Retention
Net revenue retention measures retained and expanded revenue from existing customers after churn and contraction.
Revenue Churn
Revenue churn measures recurring revenue lost from existing customers during a period.
Return on Invested Capital
Return on invested capital, or ROIC, measures after-tax operating profit relative to the capital invested in the business.
Rule of 40
Rule of 40 adds SaaS revenue growth and profitability margin to evaluate growth efficiency.
Accounts Receivable
Accounts receivable is money owed to a company by customers for goods or services already billed or delivered.
Accounts Receivable Turnover
Accounts receivable turnover measures how many times receivables are collected during a period.
Annual Recurring Revenue
Annual recurring revenue, or ARR, is recurring subscription revenue normalized to one year.
ARR Growth Rate
ARR growth rate measures the percentage increase in annual recurring revenue over a period.
ARR per Employee
ARR per employee measures annual recurring revenue divided by full-time equivalent headcount.
Cash Conversion Cycle
Cash conversion cycle measures how long cash is tied up in inventory, receivables, and payables.
Contraction Revenue
Contraction revenue is recurring revenue lost from existing customers that downgrade, reduce usage, or remove seats.
Customer Success
Customer success is the operating function responsible for helping customers achieve outcomes and renew or expand.
Days Inventory Outstanding
Days inventory outstanding measures how many days inventory is held before it is sold.
Days Payable Outstanding
Days payable outstanding measures how many days a company takes to pay suppliers.
Days Sales Outstanding
Days sales outstanding measures how many days it takes to collect receivables from customers.
Expansion Revenue
Expansion revenue is additional recurring revenue from existing customers through upsells, cross-sells, usage, or seats.
Full-Time Equivalent
Full-time equivalent, or FTE, normalizes full-time, part-time, and sometimes contractor labor into equivalent full-time headcount.
Ideal Customer Profile
Ideal customer profile defines the customer segment most likely to adopt, retain, expand, and produce attractive economics.
Operating Leverage
Operating leverage describes how revenue growth converts into margin expansion when fixed costs grow more slowly than revenue.
Revenue per Employee
Revenue per employee measures revenue divided by full-time equivalent headcount.
Working Capital
Working capital is the short-term operating capital used to fund receivables, inventory, payables, and daily operations.