A9 · Glossary

Glossary

59 terms, kept deliberately short. Each one names the term it is habitually confused with, which is the part generic glossaries leave out and the part that actually resolves the confusion.

Amortisation schedule: The instalment-by-instalment breakdown of a loan, showing how each payment splits between interest and principal and what balance remains.
Annuity due: A series of equal payments made at the *start* of each period.
APR: The annual percentage rate: the rate at which the money you actually receive amortises to the payments you actually make, including fees.
APY: The annual percentage yield: the effective annual return once compounding within the year is counted.
ARR: Annual recurring revenue, twelve times MRR.
Asset allocation: How a portfolio is divided between asset classes: equity, debt, gold, cash. The split, not the individual holdings, drives most of the variation in a portfolio return.
BMI: Body mass index: mass divided by the square of height, used as a population screening measure.
BMR: Basal metabolic rate: the energy the body uses at complete rest to maintain basic function.
Burn rate: The rate at which a business consumes cash, usually stated per month.
CAC: Customer acquisition cost: fully-loaded sales and marketing spend divided by the customers that spend produced.
CAGR: The compound annual growth rate: the smoothed annual rate that would have produced the observed change over the period.
Churn: The proportion of customers or revenue lost in a period.
CIDR: Classless inter-domain routing: writing a network as an address plus a prefix length, as in 192.168.1.0/24.
COGS: Cost of goods sold: the direct costs attributable to producing what you sold.
Compound interest: Interest charged on interest already earned or owed, as well as on the principal.
Contribution margin: Price minus variable cost: what each unit contributes toward fixed costs once its own direct cost is paid.
CTC: Cost to company: everything an employer spends on an employee in a year, including money that never reaches the employee in that year.
Dry volume factor: The multiplier converting wet concrete volume to the dry ingredient volume needed to produce it, conventionally 1.54.
EEE: Exempt-exempt-exempt: a tax treatment where the contribution, the accrual and the maturity proceeds are all untaxed.
Effective annual rate: The single annual rate that makes two differently-compounded rates comparable.
Effective tax rate: Total tax divided by total income: the average rate actually paid across every band, rather than the rate on the top band.
EMI: An equated monthly instalment: a fixed payment that covers both the interest accrued that month and some repayment of principal.
EPF: The Employees Provident Fund: a retirement fund into which an employee and employer each pay twelve percent of basic pay plus dearness allowance.
Fixed deposit: A deposit held for a fixed term at a fixed rate, with interest compounded at a stated frequency.
Flat rate: An interest convention that charges interest on the original principal for the full term, whatever has already been repaid.
Foreclosure: Closing a loan entirely before the end of its term.
Gross margin: Revenue minus the cost of goods sold, as a percentage of revenue.
GST: Goods and Services Tax: a single indirect tax on supply, charged at each stage with credit for the tax already paid on inputs.
Internal rate of return: The discount rate at which a set of cashflows exactly breaks even, so their net present value is zero.
LTV: Lifetime value: the gross profit a customer is expected to generate over their whole relationship.
Marginal tax rate: The rate applied to your next unit of income, which is the rate of the highest band you have reached and not the rate on everything you earn.
Markup: Profit as a percentage of cost.
Minimum detectable effect: The smallest true difference an experiment is designed to be able to find.
MRR: Monthly recurring revenue, with annual contracts normalised to a monthly rate.
Net present value: The value today of a stream of future cashflows, each discounted by how far away it is, less what you have to put in.
Nominal mix: A concrete mix specified by volume ratio (M20 as 1 : 1.5 : 3) rather than designed for a target strength.
NRR: Net revenue retention: what one cohort's revenue becomes after expansion, contraction and churn, excluding new customers.
Outstanding balance: The amount still owed on a loan at a given point in its term.
PPF: The Public Provident Fund: a government-backed long-term savings scheme in India with a fifteen-year lock-in and EEE tax treatment.
Prepayment: Paying more than the scheduled instalment, reducing the principal early.
Principal: The amount borrowed or invested, before any interest.
Recurring deposit: A deposit built from equal monthly instalments over a fixed term.
Reducing balance: An interest convention where each period's interest is charged only on the amount still outstanding.
ROAS: Return on ad spend: revenue attributed to a campaign divided by its cost.
ROI: Return on investment: net gain divided by the amount invested.
Runway: Cash on hand divided by net monthly burn, the months before the money runs out.
Sequence-of-returns risk: The risk that the *order* of returns, not just their average, determines whether a withdrawal plan survives.
Simple interest: Interest charged only on the original principal, never on accumulated interest.
SIP: A systematic investment plan: a fixed amount invested at a fixed interval, usually monthly.
Standard deviation: The typical distance of a value from the mean of its set.
Statistical power: The probability that a test finds a real effect of a given size, conventionally set at 80%.
Step-up SIP: A systematic investment plan whose instalment rises by a fixed percentage each year, usually to track income growth.
Subnet mask: A 32-bit value whose leading ones mark the network portion of an IPv4 address.
SWP: A systematic withdrawal plan: taking a fixed amount out of an invested corpus at a fixed interval.
TDEE: Total daily energy expenditure: basal metabolic rate multiplied by an activity factor.
TMT bar: Thermo-mechanically treated reinforcement steel, with a hard surface and a softer ductile core.
Variance: The mean squared distance of values from their mean.
Yield to maturity: The annual return on a bond held to maturity, counting both the coupons and the difference between what you paid and what you are repaid.
Z-score: The distance of a value from the mean, measured in standard deviations.