Business Part 1 Flashcards
(15 cards)
What is a KPI?
Key Performance Indicator — a metric that reflects critical business objectives.
What is revenue?
The total amount of money generated from sales before expenses.
What is gross margin?
Revenue minus cost of goods sold (COGS), often expressed as a percentage.
What is operating margin?
Operating income divided by revenue; indicates profitability after operating expenses.
What is churn rate?
The percentage of customers who stop using a service over a given time period.
What is Customer Acquisition Cost (CAC)?
The cost of acquiring a new customer.
What is Customer Lifetime Value (LTV)?
The total revenue expected from a customer over their lifetime.
Why is LTV/CAC ratio important?
It shows how much value a customer brings compared to acquisition cost.
What is Net Promoter Score (NPS)?
A customer satisfaction metric based on the likelihood to recommend a product.
What is ARPU?
Average Revenue Per User.
What are unit economics?
The direct revenues and costs associated with a single unit of product or customer.
What is contribution margin?
Revenue minus variable costs for a single unit — used to assess profitability.
What is break-even analysis?
Determining the point at which total revenue equals total costs.
What is fixed cost?
A cost that does not vary with production volume.
What is variable cost?
A cost that changes in proportion to business activity or output.
