Startup Glossary
A complete library of terms, metrics, and calculations for your startup.
Operations
Operating Profit
Operating profit is a company’s earnings after deducting operating expenses and Cost of Goods Sold (COGS). It’s also known as EBIT (earnings before interest and taxes).
Gross Profit
Gross profit is a company’s earnings after deducting the Cost of Goods Sold (COGS).
Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS) refers to the direct costs associated with producing your product or service.
Expenses
Expenses are the costs incurred by a company during typical business activities and operations.
Gross Margin
Gross margin is your company’s net sales revenue minus your Cost of Goods Sold (COGS).
Burn Rate
Burn rate is defined as the negative free cash flow (FCF) during the month.
Research And Development Expenses
R&D expenses are all costs associated with the research and development of your product or service.
Cash Runway
Cash runway is the number of months until cash runs out.
Sales and Marketing Expenses
Sales and marketing expenses are the internal and external expenses incurred that are directly and indirectly related to selling and marketing a product or service.
General And Administrative Expenses
G&A expenses are expenses incurred that aren’t directly tied to producing or selling a product or service, but necessary to maintain business operations overall.