Category: Business – This Explainer

Net Promoter Score converts a recommendation question into a customer-loyalty indicator. This explainer covers promoters, passives, detractors, survey design, segmentation, and limits.

A sales funnel organizes the stages between initial awareness and a completed sale. This explainer covers stage definitions, conversion, velocity, qualification, handoffs, and nonlinear buyer journeys.

Recurring revenue is expected to repeat under subscriptions, contracts, or habitual purchases. This explainer covers annualized metrics, retention, billing versus accounting revenue, and quality of recurrence.

Operating income shows revenue less cost of goods sold and operating expenses. This explainer covers the income statement, margins, recurring items, non-GAAP adjustments, and cash-flow limits.

Dividend yield expresses expected annual cash dividends as a percentage of share price. This explainer covers calculation, trailing and forward yields, payout capacity, price effects, and limits.

Capital structure describes how a company finances assets and operations with debt, equity, and hybrid claims. This explainer covers cost, leverage, dilution, maturity, covenants, and resilience.

Retained earnings link accumulated net income, dividends, and prior adjustments within equity. This explainer covers the statement of changes, restrictions, deficits, and misconceptions.

Terminal value captures the portion of a valuation beyond the explicit forecast period. This explainer covers perpetuity growth, exit multiples, consistency, discounting, and sensitivity.

Comparable company analysis applies valuation multiples from a peer group to a company’s financial measure. This explainer covers peer selection, enterprise and equity multiples, normalization, statistics, and market risk.

Hedging reduces selected business risks through contracts or natural offsets. This explainer covers exposure definition, forwards, futures, options, basis risk, cost, and governance.

Invoice factoring converts selected receivables into earlier cash by selling them to a factor. This explainer covers advances, reserves, recourse, verification, costs, and customer impact.

Letters of credit reduce trade-payment risk by substituting a bank’s conditional promise for the buyer’s promise. This explainer covers issuance, documents, confirmation, discrepancies, fees, and limits.