Accrual Based Accounting
The Accrual Based Accounting method recognizes earned income, even if it is not paid. All expenses are recorded when they are incurred whether or not they have been paid for or billed to be paid at a later date. Any obligation due, including taxes, will be shown as expense. Company reports results on US GAAP – Accrual Basis Accounting.
BAU – Business As Usual
Business As Usual is a term used to define existing resource capacity and technology required to keep the business running and meet existing product revenue targets.
BPT-Budget Programs Template
A Budget Programs Template is a form used to request for incremental funding to be included in the operating plan (including incremental costs due to program implementation). In addition, a BPT is used as a tracking document for revenue and cost assumptions.
CAGR-Compound Annual Growth Rate
Compound Annual Growth Rate is the average growth rate over a period of time, usually for at least two years.
Capital Expenditure (CAPEX) is the amount the company spends on items that have a useful life of more than one year (e.g., computers, servers, telecom equipment, software, etc). While the cash is spent up front, the expense (known as depreciation) for these items is spread out over the useful life of the item.
CEPS-Cash Earnings per Share
Cash Earnings per Share is the amount of money earned (net earnings) for every share of stock that the company has issued. However, the net earnings are adjusted to exclude goodwill expenses and dividends paid to certain shareholders.
Capitalization can mean the supply of funds to an enterprise through stock sales, a tangible asset recorded on the books and depreciated rather than written off as an expense. May also be internally developed software that has a future value once implemented.
Controllable Cash Flow
Controllable Cash Flow is a measure of the net inflow/outflow of cash that operating management can directly impact through management of the company. Excludes cash movements driven by interest payments, loans, dividends, etc., that are the result of corporate-level decisions.
A Cost Walk is a year over year summary of incremental costs bucketed into predetermined explanatory categories. Could also be viewed monthly or quarterly. Cost Walk categories are: Yearly Actuals w/Transfers, Unusuals, Carry-Over, Inflation, Productivity, Volume, Business as Usual, and Programs.
EBIDTA- Earnings Before Interest, Taxes, Depreciation and Amortization
Net Earnings Before Interest Taxes Depreciation and Amortization is a measure of the operating performance of a company. Revenue less operating expenses (including depreciation and amortization) is Operating Income.
FY-Full or Fiscal Year
Company Fiscal Year follows the calendar year: January through December
Fixed costs are costs that remain (relatively) unchanged in total for a given time period despite wide fluctuations in activity (the relevant range). Fixed costs do not fluctuate as levels of activity vary and take longer to escape from or reduce.
Goodwill is the amount paid for an acquisition that is above the calculated value of the net assets of the company being acquired.
HFM-Hyperian Financial Management
Hyperian Financial Management tool is a comprehensive, Web-based application that delivers global financial consolidation, reporting and analysis in a single, highly scalable software solution. This is the reporting tool for the Corporation and is considered the Book of record. Oracle Hyperion Financial Management utilizes today’s most advanced technology, yet is built to be owned and maintained by the enterprise’s finance team.
LEE-Large Element Expense
Large Element Expenses are significant expenditure categories and are comprised of a roll-up of the more detailed SAP expense codes, e.g. wages and salaries, purchased services, outsourced services, travel etc.
Operating Margin is a measurement of how much operating income is being generated from operating revenue. Generally, the higher the margin, the better it is for the business. However, not all businesses and industries can be expected to operate at the same level.
Expenses necessary for normal operation of the business; includes wages for employees, and non-capitalized investments for research and development.
The process of business expansion due to increased output, sales, or both, as opposed to mergers, acquisitions, or take-over. Typically, the organic growth rate also excludes the impact of foreign exchange.
The result of a specific decision, without direct relation to either sales volume or a volume indicator. Period Costs are not related to the passage of time.
ROI-Return on Investment
Return on Investment is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.
The return on investment formula:
Costs that do not directly fluctuate with minor volume changes, i.e,. A supervisor in a contact center would not be hired just because the volumes went up 5%. But if the volumes rose 15% there would probably be the need to hire another supervisor.
Costs that include two unlike cost behaviors, such as fixed and variable components and portray a “stepwise” behavior through discrete additions of fixed costs
UBWO-Unbudgeted Work Order
An Unbudgeted Work Order is a request for project work that was not funded in the annual Operational Plan process.
A cost which changes proportionately to a change in activity level; variable cost equals unit cost multiplied by its volume.
WACC-Weighted Average Cost of Capital
Weighted Average Cost of Capital is the blended rate that a company must pay or return to both its creditors (debt) and owners (equity)
• These two groups collectively finance the company’s assets and operations
• WACC is considered to be a company’s blended rate to finance its business
YTG-Year to Go
Year to Go is the remaining portion of the calendar year; usually used in reference to the comparison of the financial actuals for the portion of the year that has passed to the anticipated budget for the remaining portion of the year.