Finance, Math & Health Glossary
Plain-English definitions for every term used across our calculators - including formulas, worked examples, and links to the relevant tool.
A
Adjusted EBITDA
Adjusted EBITDA is EBITDA restated to exclude non-recurring, non-cash, or one-off items. It represents the normalised operating profitability of a business, stripped of distortions.
B
Break-Even Point
The break-even point is the level of sales at which total revenue exactly equals total costs — producing neither profit nor loss. It is the minimum volume a business must reach before generating operating profit.
BMI (Body Mass Index)
BMI (Body Mass Index) is a weight-to-height ratio used to classify adults as underweight, normal weight, overweight, or obese. It is the most widely used population-level screening tool for weight status.
Body Composition
Body composition is the proportional breakdown of the body into fat mass and lean mass (muscle, bone, water, organs). It is a more complete health indicator than body weight or BMI alone.
Body Fat Percentage
Body fat percentage is the proportion of total body weight that consists of fat tissue. It is a more accurate health marker than BMI because it distinguishes fat mass from lean mass.
C
Capital Expenditure (CapEx)
Capital Expenditure (CapEx) is spending on physical assets — property, plant, and equipment — that will be used for more than one year. It appears on the cash flow statement, not the income statement.
Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS) is the total direct cost of producing the goods or services a company sells. It includes raw materials, direct labour, and manufacturing overhead, but not SG&A or R&D.
CAGR (Compound Annual Growth Rate)
CAGR (Compound Annual Growth Rate) is the annualised rate at which an investment would have grown if it compounded at a steady pace each year. It smooths out year-to-year volatility to give a single comparable growth rate.
Compound Interest
Compound interest is interest calculated on both the original principal and all accumulated interest from prior periods. It causes wealth to grow exponentially over time — and debt to escalate at the same pace if left unpaid.
Contribution Margin
Contribution Margin is revenue minus all variable costs — the amount each sale contributes toward covering fixed costs and then generating profit. It is the foundation of break-even analysis and per-product profitability decisions.
Current Ratio
The current ratio measures a company's ability to pay its short-term obligations using its short-term assets. A ratio above 1.0 means current assets exceed current liabilities; below 1.0 indicates potential liquidity risk.
D
Depreciation & Amortization (D&A)
Depreciation & Amortization (D&A) is the systematic expensing of tangible assets (depreciation) and intangible assets (amortization) over their useful lives. D&A is a non-cash charge that reduces reported profit without reducing cash.
E
EBIT
EBIT (Earnings Before Interest and Tax) is a company's operating profit — the profit generated from core business operations before financing costs (interest) and government levies (tax) are applied.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) measures core operating profitability. It is the most widely used metric in business valuation, M&A analysis, and credit assessment.
EBITDA Margin
EBITDA Margin is EBITDA expressed as a percentage of revenue. It measures how much operating profit — before financing, taxes, and non-cash charges — is generated from each dollar of revenue.
EBT (Earnings Before Tax)
EBT (Earnings Before Tax) is pre-tax profit — the income remaining after all operating costs and interest expenses but before income tax is applied. It is the most useful metric for comparing profitability across different tax jurisdictions.
Effective Tax Rate
The Effective Tax Rate is the actual percentage of pre-tax income (EBT) paid in income tax. It differs from the statutory rate because of deductions, credits, loss carry-forwards, and deferred tax items.
Enterprise Value (EV)
Enterprise Value (EV) is the total market value of a company — equity plus net debt. It represents what an acquirer would pay to buy the entire business, including taking on its debt and receiving its cash.
EV/EBITDA
EV/EBITDA is a valuation multiple that compares a company's Enterprise Value to its EBITDA. It answers the question: how many years of current EBITDA would it take to pay for the entire business?
Earnings Per Share (EPS)
Earnings Per Share (EPS) is a company's net income divided by the number of shares outstanding. It converts total profit into a per-share figure that enables comparison across differently-sized companies and forms the denominator of the P/E ratio.
F
Free Cash Flow (FCF)
Free Cash Flow (FCF) is the cash generated by a business after funding its capital expenditure. It is the amount available to pay dividends, repay debt, buy back shares, or reinvest — the truest measure of a company's cash-generating ability.
Fraction
A fraction represents a part of a whole as a ratio of two integers: a numerator (top) and a denominator (bottom). Fractions, decimals, and percentages are three equivalent ways to express the same ratio.
FFMI (Fat-Free Mass Index)
FFMI (Fat-Free Mass Index) is lean body mass divided by height squared — the muscle-equivalent of BMI. It measures muscularity relative to frame size, independent of body fat percentage.
G
Gross Profit
Gross Profit is revenue minus Cost of Goods Sold (COGS). It is the first profitability figure on an income statement and shows how much money is left after paying direct production costs.
Gross Profit Margin
Gross Profit Margin is Gross Profit expressed as a percentage of revenue. It measures pricing power and production efficiency — the percentage of each revenue dollar that survives after paying direct costs.
I
Ideal Body Weight (IBW)
Ideal Body Weight (IBW) is a clinical estimate of target weight based on height and sex, derived from the Devine, Robinson, Miller, and Hamwi formulas. It was originally developed for drug dosing, not fitness targets.
L
Lean Body Mass (LBM)
Lean Body Mass (LBM) is total body weight minus fat mass — everything that is not fat: muscle, bone, organs, blood, skin, and water. LBM drives basal metabolic rate and is the basis for drug dosing calculations.
N
Net Income
Net Income is a company's bottom-line profit — revenue minus every expense including COGS, operating costs, interest, and tax. It is the figure reported as EPS (Earnings Per Share) for public companies.
Net Profit Margin
Net Profit Margin is Net Income as a percentage of revenue. It is the most comprehensive profitability ratio — the percentage of each revenue dollar that ultimately belongs to shareholders after all costs.
O
Operating Expenses (OpEx)
Operating Expenses (OpEx) are the ongoing costs of running the business that are not directly tied to production. They include SG&A, R&D, and depreciation of operating assets — but not interest or tax.
Operating Profit
Operating Profit (also called EBIT) is the profit generated from core business operations after deducting COGS and all operating expenses, but before interest and tax. It isolates operational performance from financing and tax effects.
Operating Profit Margin
Operating Profit Margin (also called EBIT Margin) is Operating Profit as a percentage of revenue. It shows how efficiently a business converts revenue into operating profit, excluding financing and tax effects.
P
P/E Ratio (Price-to-Earnings)
The P/E Ratio (Price-to-Earnings) is a stock's price divided by its annual earnings per share. It answers: how many dollars are investors paying for each dollar of profit? A higher P/E reflects higher growth expectations — or higher risk.
Percentage
A percentage is a ratio expressed as a fraction of 100, using the symbol %. It is the universal language for expressing proportions — placing values of vastly different scales on a common 0–100 reference.
Percentage Change
Percentage change measures how much a quantity has increased or decreased relative to its original value. A positive result is a gain; a negative result is a loss.
Percentage Decrease
Percentage decrease measures how much a value has fallen relative to its original value. The result is always positive — the direction is implied. A value cannot decrease by more than 100% of itself.
Percentage Difference
Percentage difference measures the relative gap between two values using their average as the base. Unlike percentage change, it is symmetric — the result is the same regardless of which value comes first.
Percentage Increase
Percentage increase measures how much a value has grown relative to its original value. It is the standard way to express growth — revenue growth, price increases, population growth.
Percentage Point
A percentage point (pp) is the arithmetic difference between two percentage values. Rising from 3% to 5% is a 2 pp increase — and also a 66.7% relative increase. These describe the same event in very different ways.
Proportion
A proportion is a statement that two ratios are equal: a/b = c/d. It is solved using cross-multiplication and underlies scaling, unit conversion, recipe adjustment, and similar-triangle geometry.
R
Revenue
Revenue (also called "the top line" or "turnover") is the total income earned from selling goods or services before any costs are deducted. Every profitability metric — gross margin, EBITDA, net profit — is derived from revenue.
Return on Investment (ROI)
Return on Investment (ROI) measures the net gain or loss on an investment relative to its cost, expressed as a percentage. It is the simplest and most universal metric for comparing the efficiency of different investments.
Return on Equity (ROE)
Return on Equity (ROE) measures how much net income a company generates for each dollar of shareholders' equity. It is the primary gauge of management's efficiency in using invested capital to create profit.
Ratio
A ratio compares two or more quantities, showing their relative sizes. Written as a:b or a/b, it is the foundation for fractions, percentages, rates, and proportions — the core language of proportional reasoning.
S
SG&A
SG&A (Selling, General & Administrative expenses) are the overhead costs of running the business: sales force, marketing, executive salaries, rent, and back-office functions. SG&A is deducted from Gross Profit to arrive at Operating Profit.
U
Unit Rate
A unit rate is a ratio with a denominator of exactly 1, expressing how much of one quantity corresponds to a single unit of another. Speed in km/h, price per kg, and words per minute are all unit rates.
W
Working Capital
Working Capital is the difference between current assets (cash, receivables, inventory) and current liabilities (payables, short-term debt). It measures a company's short-term liquidity — its ability to meet obligations due within a year.
Waist Circumference
Waist circumference measures abdominal girth at the natural waist. It is a direct indicator of visceral fat — the most metabolically harmful fat depot — and predicts cardiometabolic risk independently of BMI.