Glossary

Budget Variance Analysis

Budget variance analysis compares actual financial results to budgeted values for a given period and analyzes the differences.

Cost Volume Profit Analysis

CVP analysis examines the relationship between fixed costs, variable costs, sales volume, and profit to determine the break-even point and target profit levels.

CapEx includes spending on items like buildings, equipment, and technology that a company expects to use for more than one year. This type of spending is different from day-to-day operational costs. Companies record CapEx on their balance sheets and spread the cost over several years through depreciation.

Driver-Based Planning

Driver-based planning is a financial planning approach that focuses on identifying and using key business drivers—such as sales volume, customer acquisition costs, or production rates—to create accurate forecasts and budgets.

Flexible Budgeting

A flexible budget is a dynamic financial plan that adjusts based on changes in activity levels or output, providing a realistic and actionable approach to financial management.

Variance Analysis

Variance analysis helps businesses compare actual results to planned outcomes. It focuses on three main areas: materials, labor, and overhead.

Income Statement

An income statement is a financial document that summarizes a company's revenues, expenses, and profits (or losses) over a specific accounting period, typically a quarter or year.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of your company's financial position at a specific point in time. It captures what your business owns, what it owes, and what remains for shareholders on a particular date.

Strategic Planning

Strategic planning is the process of defining where your organization wants to go and how it will get there. It involves setting clear goals, allocating resources effectively, and creating a roadmap for achieving long-term success.

Net Income

Net income is the amount of money remaining after all expenses, taxes, and costs have been subtracted from total revenue.

Financial Planning

Financial planning is the systematic process of managing your financial resources to achieve specific life goals and objectives.

Cash Flow Statement

A Cash Flow Statement is a financial report that shows how cash moves in and out of a company during a specific period (like a month, quarter, or year).

Cash Flow

Cash flow is the movement of money in and out of a business over a specific period.
It shows how much cash a company receives (inflows) and spends (outflows), helping to measure its liquidity — the ability to pay bills and operate smoothly.

Business Intelligence

Business Intelligence represents a technology-driven approach that transforms raw data into meaningful insights for strategic decision-making. At its core, BI combines data collection, storage, and analysis to help organizations understand their performance, identify trends, and make informed choices about their future direction.

Operating Expenses

Operating expenses (OPEX) are the day-to-day costs a business incurs to run its regular operations and keep the company functioning.
These are recurring expenses needed to generate revenue but do not include the cost of producing goods (COGS).

Financial Analysis

Financial analysis is the process of examining a company’s financial data to understand its performance, stability, and profitability.

Finance Glossary