• Luis Valini

Termos Financeiros utilizados em Modelagem Financeira

Atualizado: Abr 13


Muitas vezes ao analisar uma Modelagem Financeira ou um Valuation, nos deparamos com termos e abreviações em inglês que desconhecemos. E, por mais que conhecemos as estruturas dos modelos e relatórios, estes termos desconhecidos acabam nos dificultando nas interpretações e análises.


Abaixo listamos os principais termos e definições em inglês. utilizados em Valuation, Modelagem Financeira em Excel:


A - Actual figure

Actual or present value/amount.


ARPU - Average Revenue per User

Defined as the total revenue divided by the number of subscribers.


Assets

Things that are resources owned by a company and which have future economic value that can be measured and can be expressed in dollars. Examples include cash, investments, accounts receivable, inventory, supplies, land, buildings, equipment, and vehicles.

Assets are part of the accounting equation and the balance sheet, both of which are presented in this format:

     - Assets = Liabilities + Stockholders' (or Owner's) Equity.


Balance Sheet

Is one of the three fundamental financial statements and is key to both financial modeling and accounting. The balance sheet displays the company’s total assets, and how these assets are financed, through either debt or equity. It can also be referred to as a statement of net worth, or a statement of financial position. The balance sheet is based on the fundamental equation: Assets = Liabilities + Equity.


Beta

Beta is a numeric value that measures the fluctuations of a stock to changes in the overall stock market.

Beta measures the responsiveness of a stock's price to changes in the overall stock market. On comparison of the benchmark index for e.g. NSE Nifty to a particular stock returns, a pattern develops that shows the stock's openness to the market risk. This helps the investor to decide whether he wants to go for the riskier stock that is highly correlated with the market (beta above 1), or with a less volatile one (beta below 1).


B.O.T. - Build, Operate, and Transfer

A kind of Project that makes use of project finance structure.


Break-even analysis

Break Even Analysis in economics, business, and cost accounting refers to the point in which total cost and total revenue are equal. A break even point analysis is used to determine the number of units or dollars of revenue needed to cover total costs (fixed and variable costs).


CAC - Customer Acquisition Costs

Cost associated in convincing a customer to buy a product/service.


CAPEX - Capital Expenditures

Money spent by a business or organization on acquiring or maintaining fixed assets.


CAPM - Capital Asset Price Model

It is used to calculate the predicted rate of return of any risky asset. It compares the relationship between systematic risk and expected return. Typically, it’s used on stocks. However, CAPM can also be used throughout financial decision making to price riskier investments. When pricing them, it’s important to reach a balance between the price due to risk and the expected return – thus, using CAPM can help.

The main idea and impulse behind using CAPM is that investors need to be compensated for two things: the time value of money and the risk they are assuming. CAPM takes both into account.


Cash Flow

Cash Flow (CF) is the increase or decrease in the amount of money a business, institution, or individual has. In finance, the term is used to describe the amount of cash (currency) that is generated or consumed in a given time period.

There are several types of Cash Flow, so it’s important to have a solid understanding of what each of them is. When someone refers to CF, they could mean any of the types listed below, so be sure to clarify which cash flow term is being used.

Types of cash flow include:

Cash from Operating Activities – Cash that is generated by a company’s core business activities – does not include cash flow from investing. This is found on the company’s Statement of Cash Flows (the first section).

Cash from Investing Activities include cash activities related to noncurrent assets. Noncurrent assets include long-term investments; property, plant, and equipment; and he principal amount of loans made to other entities.

Cash form Financing activities include cash activities related to noncurrent liabilities and owners’ equity. Noncurrent liabilities and owners’ equity items include the principal amount of long-term debt,  stock sales and repurchases, and dividend payments. 

Free Cash Flow to Equity (FCFE) – FCFE represents the cash that’s available after reinvestment back into the business (capital expenditures). 

Free Cash Flow to the Firm (FCFF) – This is a measure that assumes a company has no leverage (debt). It is used in financial modeling and valuation. 

Net Change in Cash – The change in the amount of cash flow from one accounting period to the next. This is found at the bottom of the Cash Flow Statement.


COGS - Cost of goods sold

Direct costs attributable to the production of the goods sold in a company.


Contribution Margin

A business’s contribution margin – also called the gross margin – is the money left over from sales after paying all variable expenses associated with producing a product. Subtracting fixed expenses, such as rent, equipment leases, and salaries from your contribution margin yields your net income, or profit.


CPC - Cost per Click

Also known as Pay per click, an internet advertising model used to direct traffic to websites, in which an advertiser pays a publisher (typically a website owner or a network of websites) when the ad is clicked.


Cum. - Cumulated

as is


Current Asset

A current asset is an item on an entity's balance sheet that is either cash, a cash equivalent, or which can be converted into cash within one year. If an organization has an operating cycle lasting more than one year, an asset is still classified as current as long as it is converted into cash within the operating cycle. Examples of current assets are:

  • Cash, including foreign currency

  • Investments, except for investments that cannot be easily liquidated

  • Prepaid expenses

  • Accounts receivable 

  • Inventory 

Current Liabilities

Current (or short-term) liabilities are liabilities that a company is required to settle within the next twelve months or which it expects to settle within its normal operating cycle.

Liabilities are financial obligations which require transfer of assets (mainly cash) for settlement. They are classified into current and non-current liabilities based on the urgency of their settlement. Comparison of current liabilities with current assets helps creditors, debt-holders and investors assess a company’s liquidity position.

Here is a list of typical current liabilities:

  • Accounts payable

  • Salaries payable

  • Short-term debt payable

  • Short-term notes payable

  • Current lease liability

  • Interest payable

  • Current tax payable

  • Accrued expenses

  • Dividends payable

D&A - Depreciation & Amortization

Used to determine the depreciation costs for both tangible and intangible assets.

Depreciation is the reduction in the utility of the fixed asset like plant & machinery, furniture & fixtures, vehicles, buildings, etc. because of obsolescence through technology or market conditions, natural wear and tear, the passage of time, exhaustion of subject matter and so on.


DCF - Discounted Free Cash Flows

Method of valuing a project, company, or asset using the concepts of the time value of money.


 DPO - Days’ Payable Outstanding

A ratio used to measure a company’s ability to pay its invoices or bills to its suppliers, vendors or creditors.


DSI - Days’ Sales in Inventory

Also known as Days in Inventory, A ratio used to measure the average number of days a company was able to sell the average number of inventories they held during that time period of year.


DSO - Days’ Sales Outstanding

Also known as Days in Receivable, A ratio used to calculate the estimation of a company’s average collection period or in other words, used to assess a company’s management condition of their accounts receivables.


EBIT - Earnings before interest and taxes

Measure of a firm’s profit that includes all expenses except interest and income tax expenses.


EBITDA - Earnings before interest, taxes, depreciation and amortization

An accounting measure calculated using a company’s net earnings, before interest expenses, taxes, depreciation, and amortization are subtracted, as a proxy for a company’s current operating profitability.


Equity

In accounting equity is the value attributable to the owners of a business. The book valuae of equity is calculated as the difference between assets and liabilities on the company’s balance sheet, while the market value of equity is based on the current share price (if public) or a value that is determined by investors or valuation professionals. The account can also be called shareholders/owners/stockholders equity or net worth.

There are generally two types of equity:

  •  Book value

  • Market value


F - Forecasted figure

Forecasted value/amount


Fixed Expenses

Fixed expenses are those expenses that do not change when there is a change in production or sales level. Expenses like rent, insurance, payment on loans, management salaries, advertising are examples of fixed expenses. They change over a period of time.


FTE - Full Time Equivalent

Also known as whole time equivalent (WTE), it is a unit that indicates the workload of an employed person.


GP - Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.


Income Statement

Is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period, with the other two key statements being the balance sheet and the statement of cash flows.


Inflation Premium

The inflation premium is a method used in investing and banking to calculate the normal rate of return on an asset or investment when the general cost of goods and services rises over time, known as inflation. The real return, therefore, or real rate of return, on an investment is reduced by the inflation premium, and this reduction tends to be greater the longer that the investment takes to mature. An example of this would be a government bond that yields a 6% return on the investment in one year, but with an inflation premium over the course of the same year of 2% for the increase in prices. This reduces the real return of the bond to 4% by the end of the year.


Interest Rate

Is percentage, is the amount charged by a lender that a borrower must pay for using the lender’s principal. In other words, this is the extra amount beyond the premium that the borrow must repay the lender.


IRR - Internal rate on return

Metric used in capital budgeting to estimate the profitability of potential investments.


KPI - Key Performance Indicator

Measurable value that demonstrates how effectively a company is achieving a defined key business objectives.


Liabilities

Liabilities in Accounting is an account in which the company maintains all its records like such as debts, obligations, payable income taxes, customer deposits, wages payable, expenses occurred. Liability accounts will normally have a credit balance.


Loans

A sum of money that a company borrow


M/Y - Month/Year

as is


MRR - Monthly Recurring Revenues

Income that a business can count on receiving every single month.


Net Profit

This is the bottom line of the income statement. It is the mathematical result of revenues and gains minus the cost of goods sold and all expenses and losses (including income tax expense if the company is a regular corporation) provided the result is a positive amount. If the net amount is a negative amount, it is referred to as a net loss.


Non-Current Asset

Asset that is not to be converted to cash within 12 months of the balance sheet date.

Resource that is not expected to be consumed or sold within the normal operating cycle of a firm, such as equipment, machinery, and plant.


Noncurrent liabilities

Are those obligations not due for settlement within one year. These liabilities are separately classified in an entity's balance sheet, away from current liabilities. Examples of noncurrent liabilities are:

•    Long-term portion of debt payable

•    Long-term portion of bonds payable


NOPLAT  -Net Operating Profit Less Adjusted Taxes 

A measure of profit that includes the costs and tax benefits of debt financing. Put another way, NOPLAT is earnings before interest and taxes (EBIT) adjusted for the impact of taxes.


NPV - Net Present Value

The value in the present of a sum of money, in contrast to some future value it will have when it has been invested at compound interest.


OPEX - Operating costs

The expenses which are related to the operation of a business, or to the operation of a device, component, piece of equipment or facility.


P&L - Profit and Loss

Also known as Income statement. A report of the comprehensive income, expenses, and profits or losses of a company.


Rev - Revenues

Income or Sales


Risk-free rate

The risk-free interest rate is the rate of interest paid on the least risky financial instruments, normally considered to be the shortest-dated risk-free bond. For instance, in the U.S. the risk-free interest rate is generally assumed to be that paid on a three-month Treasury bill.


Risk premium

Those who take on riskier investments are compensated with a greater return. The risk premium is the amount the investor should expect to receive for risking the loss of his or her money for making the investment.

The risk premium is the rate of return on an investment over and above the risk-free or guaranteed rate of return.


ROA - Return on Assets

Sometimes referred to as return on investment, it is a ratio used to assess a company’s ability to earn profit relative to its overall resources.


ROCE - Return on Capital Employed

A ratio which compares a company’s Net Operating Profit Less Adjusted Taxes (NOPLATI to the capital it employs. The beauty of this ratio is that the financing structure does not matter and one can compare that ratio to other businesses or to the business’ cost of capital.


ROE - Return on Equity

The amount of net income returned as a percentage of shareholders’ equity.


ROIC - Return on Invested Capital

Same as ROCE (as Capital Employed = Invested Capital)


SPE/SPV - Special Purpose Entity / Vehicle

A subsidiary company with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt.


t - Tax rate %

Percentage at which an individual or corporation is taxed.


TV - Terminal Value

The present value of all future cash flows, with the assumption of perpetual stable growth in some cases.


Valuation

Valuation refers to the process of determining the present value of a company or an asset. It can be done using a number of techniques. Analysts that want to place value on a company normally look at the management of the business, the prospective future earnings, the market value of the company’s assets, and its capital structure composition


Unlevered Free Cash Flow

A firm’s cash flow shown to investor’s as a measure of performance that doesn’t take into account interest payments on debts outstanding.


USD - United States Dollar

USA currency


Variable Expenses

A variable cost is an expense that rises or falls in direct proportion to production volume. Variable costs differ from fixed costs, which remain the same even as production and sales volume changes.

Common variable costs include:

  • Raw materials

  • Sales commissions

  • Packaging

  • Shipping 

  • Labor directly associated with production

  • Credit card fees


WACC

WACC stands for the weighted average cost of capital. It represents the rate of return a company must make on the money it has invested to stop investors putting their money elsewhere. In short, it is the company’s cost of money.


Working Capital

Working capital is money available to a company for day-to-day operations. Simply put, working capital measures a company's liquidity, efficiency, and overall health. Because it includes cash, inventory, accounts receivable, accounts payable, the portion of debt due within one year, and other short-term accounts, a company's working capital reflects the results of a host of company activities, including inventory management, debt management, revenue collection, and payments to suppliers.


WTE - Whole Time Equivalent

Another name for full time equivalent, a unit that indicates the workload of an employed person.

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