Glossary

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  • Your neighbor who shared your lot line.  Their property edge touches your property edge.
  • Accounts Payable is the account that tracks (lists with amounts) that your child care business owes to suppliers, vendors, and others that provide goods and services to your business.
  • A measure of how long it takes for the business to pay its creditors. A stable higher number of days is generally an indicator of good cash management. A longer time taken to pay creditors has a positive impact on Cash Flow. But an excessive(...) Read More
  • An account that lists or tracks (with amounts) people that owe your child care business money.  This most often will be parents that owe tuition payments. TIP: Accounts Receivables - overdue parent tuition payments can lead to financial(...) Read More
  • A measure of how long it takes for the business to collect the amounts due from customers. A lower number indicates that it takes the business fewer days to collect its accounts receivable. A shorter time to collect funds due has a positive(...) Read More
  • A measure of the efficiency or effectiveness with which the business manages its resources or assets. This measure indicates the speed with which Net Operating Assets (Equity + Debt) are converted or turned into sales. This can be improved by(...) Read More
  • An increase in the scope of work and or cost.
  • Covered by another party’s insurance policy.
  • Gravel or crushed stone added to the concrete mix.
  • American Institute of Architects.
  • The exchange, switching out, of interior air for fresh exterior air.  Think “out with the old, in with the new.”
  • The amount of money set aside for the purchase of yet-to-be specified materials.
  • The pre-agreed to price for altering a task or material in the scope of work.
  • Plans to reflect the work executed to construct a building and all of its systems.  Field changes sometimes occur that can be significantly different than the original design, an as-built records the changes and documents what was actually built.
  • A general way of determining a value indication of a business’s assets and/or equity using one or more methods based directly on the value of the assets of the company less liabilities. (International Glossary of Business Valuation Terms)
  • A measure of how effectively the business has used its assets to generate revenue. The business makes $1,558 of sales for every $100 of its asset investment. The higher the number the better the turnover. Ways to improve this metric include(...) Read More
  • A single sash window hinged at the top.  Usually seen in basements.
  • A delay in shipment of a product from the manufacturer.
  • To place and compress soil around a foundation or within an open excavation hole on site.
  • Vertical supports under a handrail to make a railing system.
  • A cost proposed based on the scope of work that is fully determined.
  • A wall that supports the weight of a portion of the building.
  • A raised shoulder of earth, a small pile of dirt.
  • A package of information necessary for a contractor to produce a bid, includes building plans, specifications, and information about known pre-existing conditions on the site.
  • Requesting proposed prices from more than one contractor.
  • One square foot of lumber an inch thick.  That is a 2x4 that is 8′ long has 5.3 board feet.  Multiply the height in inches times the width in inches times the length in feet and divide by 12.
  • A window system that protrudes from the plane of the wall in which it is installed.  Similar to a Bay Window, but curved in shapes like the bow of a bow and arrow.
  • A three-sided window treatment spanning the top of a window.
  • The breakeven safety margin represents the gap between the actual revenue level and the breakeven point. In other words, the amount by which revenue can drop before losses begins to be incurred. The higher the margin of safety, the lower the(...) Read More
  • City, County, or State employee who reviews, and approves plans and construction work for compliance with building codes.
  • A written consent for permission to construct work by approved plans.
  • Materials installed, applied, or assembled in or on a structure.
  • A framed out lower portion of the ceiling, typically used to conceal something like piping or to give a sense of separation between rooms.
  • A connection made from square end to square end.
  • To purchase the bulk of materials needed for a portion of a project.
  • The amount of impact on the environment.  A large carbon footprint is bad for the environment, a small carbon footprint is a good thing.
  • To include or account for something.
  • A window with a rotating crank-out movement.
  • A measure of the length of time between the purchase of raw materials and the collection of accounts receivable from customers. The Cash Conversion Cycle measures the time between outlay of cash and cash recovery. A shorter cycle minimizes the(...) Read More
  • A measure of the ability to service interest payments from operating cash flows. A lower result may indicate that the cash flow generated from the company's operations will be insufficient to cover interest payments. For this period, the cash(...) Read More
  • A measure of the cash and cash equivalents in actual possession by the company at a particular time. At the end of this period, the child care business held $21,098 of cash and cash equivalents. Cash on Hand is above the required target of(...) Read More
  • The Cash Ratio measures the availability of cash and cash equivalents there are to cover current liabilities. Few businesses have sufficient cash and cash equivalents to fully cover current liabilities. Accordingly, a cash ratio of less than 1(...) Read More
  • Cash to current assets is a liquidity ratio. Liquidity ratios measure a company's ability to meet financial obligations when due. In the short-term can the company pay all bills when due? Cash to current assets is a liquidity ratio that(...) Read More
  • A letter from the bank appraiser, usually the Architect of Record, to the lending bank, certifying that the project was completed in accordance with the plans and specifications.
  • A document certifying that a contractor is insured.
  • Written permission from the building inspector that a building can be occupied.
  • A 45-degree cut into a 90-degree outside corner.  Picture frames have chamfer corners.
  • An alteration to the terms of a construction contract, resulting in cost and scheduling changes.
  • A written proposal for cost and time changes to the contract.
  • An opening in a drain pipe used for cleaning or un-clogging it.
  • Permission to use land or building space under certain stated conditions, in a way other than ordinarily permitted by zoning regulations.
  • Hollow tubing used to contain and protect lengths of electrical wire or plumbing pipe.
  • Permit approved plans, specifications, and building contract used for the construction of a project.
  • The management of a construction project.
  • A timed plan for the building construction of a project.
  • Money set aside to cover the cost of unexpected expenses.
  • Various approaches to the construction contract between the Owner and Contractor.  Examples include Lump Sum, Cost Plus, and Time and Materials.
  • An approximation of the expenses associated with tasks or materials.
  • A group of workers.
  • A concrete pipe that passes underground to direct and drain water.
  • A measure of liquidity. This measure compares the totals of the current assets and current liabilities. The higher the current ratio, the greater the 'cushion' between current obligations and the business's ability to pay them. Generally, a(...) Read More
  • Your investment to acquire a new enrollment, like any investment, should be less than the value the enrollment will return to your child care business. The Customer Lifetime Value or Lifetime Value is one of the most important Key Performance(...) Read More
  • A written, diagram, or photo representation of a product.
  • A measure of the proportion of the business's assets that are financed through debt.
  • A provision that is part of the written agreement between the child care business seller and buyer where the seller of a business will receive additional payments based on the future performance of the business sold.
  • A measure of the percentage change in EBIT for the period. A combination of growth in revenues and growth in profits presents a balanced measure of growth For this period, EBIT growth of -192.07% was less than the target of 0.17%.
  • This measure is underpinned by the concept that a business only adds value for its shareholders if it makes a profit in excess of its cost of capital. Economic profit is calculated as the amount by which profits exceed or fall short of the(...) Read More
  • A measure of the proportion of the business's assets that are financed by shareholder's equity.
  • A measure of the percentage change in total expenses for the period. While growing revenues, management need to monitor expenses. A significant increase in expenses may indicate the eroding of margins and should prompt action. For this period,(...) Read More
  • A measure of how efficiently the business is conducting its operations. While growing revenues, management needs to monitor the change in expenses. A significant rise in the expense-to-revenue ratio may indicate the eroding of margins and(...) Read More
  • A measure of how effectively the business has used its fixed assets to generate revenue. The business makes $2,444 of sales for every $100 of gross fixed assets. Ways to improve this metric include using fixed assets more efficiently and/or(...) Read More
  • Free cash flow is the cash generated by the business, after paying its expenses and investing for future growth. It is the cash left after subtracting capital expenditure from operating cash flow. The term “free cash flow” is used because this(...) Read More
  • A measure of the percentage change in gross profit for the period. For this period, gross profit growth of -18.54% was substantially less than the target of 0.17%.
  • A measure of the proportion of revenue that is left after deducting all costs directly related to the sales. For each $100 in sales, the business retains $83.96 after deducting the cost of sales. The gross profit serves as the source for paying(...) Read More
  • A general way of determining a value indication of a business’s assets and/or equity using one or more methods wherein a value is determined by converting anticipated benefits. The various methods of valuation that appraisers use in practice(...) Read More
  • A measure of the ability to service its interest payments from the profits earned by the business. A result of more than 2 is generally considered to be safe, but businesses with volatile earnings may require a higher level of cover. A lower(...) Read More
  • A measure of how efficiently the business converts inventory into sales. A lower number of days is generally an indicator of good inventory management. A shorter time of holding inventory has a positive impact on cash flow. But a low result can(...) Read More
  • A general way of determining a value indication of a business’s assets and/or equity using one or more methods that compares the subject to similar investments that have been sold. The various methods of valuation that appraisers use in(...) Read More
  • Net cash flow is the cash flow remaining after operating, investing, and financing activities. Financing activities may include cash outflows such as interest payments to lenders or dividend payments to shareholders
  • A measure of the proportion of revenue that is left after all expenses have been paid. The business makes ($23.07) of net profit for every $100 it generates in revenue. For this period, the Net Profit After Tax margin is below the required(...) Read More
  • A measure of the additional cash that will either be generated or used up by the next $100 of products or services that the business sells. If the Net Variable Cash Flow is positive then for every additional $100 of revenue the business will(...) Read More
  • Operating cash flow is simply the cash generated by the operating activities of the child care business. Operating activities include the production, sales, and delivery of the company’s product and/or services as well as collecting payment(...) Read More
  • Operating Cash Flow to Current Liabilities is a measure of how well current liabilities are covered by the cash flow generated from operational activities. This metric provides a useful indicator of a business's liquidity in the short-term.(...) Read More
  • A measure of the proportion of revenue that is left after deducting all expenses. This excludes finance costs and tax expenses. The business makes ($8.04) of EBIT for every $100 it generates of revenue. The profitability ratio can be further(...) Read More
  • The Quick Ratio measures the availability of assets that can quickly be converted into cash to cover current liabilities. Inventory and other less liquid current assets are excluded from this calculation. The Quick Ratio is a measure of the(...) Read More
  • A measure of the efficiency and profitability of capital investment (ie. funds provided by shareholders & lenders). Return on Capital Employed monitors the relationship between the capital ('inputs') used by the business and the earnings(...) Read More
  • A measure of the percentage change in revenue for the period. Management should ensure that revenues increase at rates higher than general economic growth rates (ie. inflation). For this period, revenue growth of -17.89% was below the target(...) Read More
  • Seller financing is a loan provided by the child care business owner to the buyer of their child care business.
  • A measure of the total amount of money received by a child care business for child care services provided. In the example below, the business has earned a total revenue of $108,585. Strategies to improve revenue may include increasing prices,(...) Read More
  • A measure of the adequacy of working capital to support sales activity. This measure indicates the investment made in working capital for each unit of revenue. The trend of this ratio is particularly useful for growing businesses. If sales(...) Read More

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