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Budgeting is the process of creating a plan to spend your money. This planning process allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. In a corporate setting, it is a comprehensive projection of how an organization will spend its resources over a specific period.

Variance Analysis is used to identify and explain the reasons for the difference between budgeted and actual financial activity. This process leads to cost control and helps in the planning of future budgets.

Forecasting involves making predictions about the future based on past and present data and most commonly by analysis of trends. It is a common financial planning and analysis function and plays an integral role in setting expectations for future performance.

A Three-Way Financial Model includes the income statement, balance sheet, and cash flow statement. These three statements are interlinked with one another providing a comprehensive model of a company's financial performance.

What-If Analysis refers to the process of changing the values in cells to see how those changes will affect the outcome of formulas on the worksheet. It is a key component of risk management and strategic planning.

Financial Modeling is the task of building an abstract representation (a model) of a real-world financial situation. This is a mathematical model designed to represent the performance of a financial asset or portfolio of a business, project, or any other investment.

Capital Structure refers to the mix of debt and equity financing that a company uses to fund its operations and growth. The optimal capital structure is one that offers a balance between the ideal debt-to-equity range and minimizes the firm's cost of capital.

WACC is the rate that a company is expected to pay on average to all its security holders to finance its assets. It is the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere.

Leverage Ratios measure the amount of capital that comes in the form of a debt (loans), or the assessment of the company's ability to meet its financial obligations. Common leverage ratios include debt-to-equity and interest coverage ratio.

Liquidity Ratios measure a company's ability to pay off its current obligations (liabilities) with current assets. The higher the value of the ratio, the greater the margin of safety that the company possesses to cover short-term debts. Common liquidity ratios include the current ratio and quick ratio.

Profitability Ratios measure a company’s ability to generate earnings relative to its revenue, operating costs, balance sheet assets, and shareholders' equity over time, using data from a specific point in time. Key profitability ratios include return on assets (ROA), return on equity (ROE), and profit margin.

Return on Investment is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI is calculated by dividing the benefit (return) of an investment by the cost of the investment. The result is expressed as a percentage or a ratio.

Breakeven Analysis determines when an investment will generate a positive return. It involves calculating the point at which revenue received equals the costs associated with receiving the revenue. Breakeven analysis can help businesses to determine the level of sales needed to cover costs.

CVP Analysis is a method used to understand the interrelationships between cost, volume, and profit in an organization by focusing on interactions among the following five elements: prices of products, volume or level of activity, per unit variable costs, total fixed costs, and mix of products sold.

The Internal Rate of Return is a metric used in capital budgeting to estimate the profitability of potential investments. IRR is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Net Present Value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.

Payback Period is the time required for the return on an investment to repay the sum of the original investment. It is a simple tool that tells you how long it will take to recoup the value of an initial investment from the net positive cash flows the investment is expected to generate.

Operating Leverage is a measure that assesses the extent to which a company can increase operating income by increasing revenue. A company with high operating leverage has a large proportion of fixed operational costs in relation to variable costs, which magnifies gains or losses as sales increase or decrease.

Financial Leverage is the use of borrowed money (debt) to finance the acquisition of assets. The premise of financial leverage is that the borrowed funds can be invested with a higher return than the interest costs, allowing excess returns to benefit shareholders.

Cost of Debt is the effective rate that a company pays on its borrowed funds. The cost of debt is part of a company’s capital structure and is involved in the calculation of the weighted average cost of capital (WACC). It takes into account the tax benefits associated with interest payments.

Cost of Equity represents the compensation that the market demands in exchange for owning the asset and bearing the risk of ownership. It is calculated by using models such as the Capital Asset Pricing Model (CAPM) and is a critical part of the WACC calculation.

Cash Conversion Cycle is a metric that expresses the length of time, in days, that it takes for a company to convert resource inputs into cash flows. The cycle tells how long a firm will be deprived of cash if it increases its investment in resources in order to expand customer sales.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's overall financial performance and is used as an alternative to net income in some cases. EBITDA strips out the cost of debt capital and tax effects, as well as depreciation and amortization from the profitability measure.

Margin of Safety is the difference between actual or expected sales and sales at the break-even point. It provides an indication of the riskiness of a business by showing how far sales can fall before a company reaches its break-even point.

Contribution Margin is a cost accounting concept that lets a company determine the profitability of individual items. The contribution margin is calculated by subtracting the variable costs of a product from the price of the product, giving the amount that contributes to covering the fixed costs.

Operating Cycle, also known as the working capital cycle, is the amount of time it takes a business to turn its inventory into cash. It measures the time taken from buying raw materials or goods for sale to receiving the cash from the sale of the goods.

Strategic Planning is an organizational management activity used to set priorities, focus energy and resources, ensure that employees are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment.

Sensitivity Analysis is a tool used to determine how different values of an independent variable will impact a particular dependent variable under a given set of assumptions. This analysis is used within specific boundaries that depend on one or more input variables.