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THE UNCOMPLICATED GLOSSARY
Financial jargon, explained without the jargon
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APR
Annual Percentage Rate
APR is the yearly cost of borrowing money, including interest and certain charges.
Budget
A budget is a plan for the money you expect to receive and spend.
Compound Growth
Compound growth is growth earned not only on the money you put in, but also on earlier growth.
Credit Score
A credit score is a numerical or rating-based indication used by a credit reference agency to summarise information in your credit report.
Debt
Debt is money you owe to another person, business or financial provider.
Emergency Fund
An emergency fund is money set aside to help deal with unexpected costs or a drop in income.
Financial Resilience
Financial resilience is your ability to cope with unexpected financial pressure and recover from it.
Gross Income
Gross income is income before deductions such as income tax, National Insurance or pension contributions where applicable.
Inflation
Inflation is a rise in the general level of prices over time.
Interest
Interest is the amount charged for borrowing money or paid on certain savings and investments.
Investment
An investment is money put into an asset or financial product with the aim of generating a return over time.
ISA
Individual Savings Account
An ISA is a UK tax-advantaged savings or investment account subject to the rules and limits applying to the particular type of ISA.
JISA
Junior Individual Savings Account
A JISA is a Junior Individual Savings Account designed for saving or investing for a child under the applicable Junior ISA rules.
Mortgage
A mortgage is a loan secured against property, usually used to buy a home or other property.
Net Income
Net income is the amount of income left after relevant deductions have been taken from gross income.
Pension
A pension is a long-term arrangement designed to provide income or funds for later life, subject to the rules of the particular pension.
Protection
Protection is the broad term for financial arrangements designed to help reduce the financial impact of specified risks.
Risk
Risk is the possibility that an event or outcome could be different from what you expect, including the possibility of losing money.
SIPP
Self-Invested Personal Pension
A SIPP is a type of personal pension that can offer a wider range of investment choices, subject to its rules and provider.
State Pension
The State Pension is a regular payment from the UK government for people who meet the relevant eligibility and National Insurance requirements.
Break-even
Break-even is the level of sales at which a business covers its relevant costs without making a profit or loss.
Cash Flow
Cash flow is the movement of money into and out of a business over time.
Cost of Sales
Cost of sales is the direct cost associated with producing or delivering the goods or services sold.
Fixed Costs
Fixed costs are costs that do not usually change directly with the amount of sales over a particular period.
Variable Costs
Variable costs are costs that change with the level of sales or activity.
Gross Profit
Gross profit is sales revenue minus the direct costs associated with those sales.
Gross Profit Margin
GPM
Gross profit margin is gross profit expressed as a percentage of sales.
Net Profit
Net profit is the amount left after the business's relevant costs and expenses have been deducted from its revenue.
Net Profit Margin
NPM
Net profit margin is net profit expressed as a percentage of sales.
Overheads
Overheads are the regular business costs that support the operation of the business but are not normally treated as direct costs of an individual sale.
Revenue
Revenue is the income generated from selling goods or services before deducting costs and expenses.
Working Capital
Working capital generally refers to the short-term resources available to a business to support its day-to-day operations, often considered in relation to current assets and current liabilities.
Cash Conversion
Cash conversion describes how quickly a business turns its sales and other trading activity into cash received.
Pricing
Pricing is the process of deciding what to charge for a product or service.
Margin
Margin describes the amount left between a selling price or revenue figure and the relevant cost, often expressed as a percentage.
Cost Per Lead
CPL
Cost per lead is the average marketing cost associated with generating each lead or enquiry.
Customer Acquisition Cost
CAC
Customer Acquisition Cost is the average cost associated with acquiring a new customer.
Return on Investment
ROI
Return on Investment is a way of comparing the return generated by an investment with the amount invested.
Key Person
A key person is someone whose knowledge, skills, relationships or role are particularly important to the operation or value of a business.
Business Protection
Business protection is the broad term for arrangements intended to reduce the financial impact of specified risks affecting a business, its owners or key people.
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