Key Terms

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Definitions and links to the calculator tabs where each concept is used.

Enterprise Value (EV)
The total value of a business (equity + debt − cash). In practice, often approximated as net income (or EBITDA) × a valuation multiple. Used in Tab 1.
EBITDA
Earnings before interest, taxes, depreciation, and amortization. A proxy for operating cash flow; multiples (e.g. EV/EBITDA) are commonly applied to it for valuation. Tab 1 uses net income as the multiple base.
Valuation multiples
Ratios (e.g. EV/EBITDA, P/E) used to compare businesses. Industry medians from comparable companies determine typical “×” (e.g. 6× EBITDA). Tab 1 lets you select industry and apply an optional private-company discount.
Multiplier effect
A dollar of extra net income increases enterprise value by that dollar × the multiple (e.g. $100K at 6× = $600K EV increase). Tab 1 shows how fee increases and bundling flow through to EV.
Effective processing rate
Total payment processing fees ÷ total card/volume. The single number that matters when comparing processors. Tab 2 compares your rate to an industry-best benchmark.
Surcharging / cash discount
Compliant programs that pass card processing costs to customers (surcharge) or offer a discount for cash. Tab 2 models potential savings if you don’t currently use them.
Interchange-Plus vs. tiered pricing
Interchange-Plus passes through card network interchange plus a stated markup, so you see true cost. Tiered pricing groups transactions into buckets (e.g. “qualified,” “mid-qualified,” “non-qualified”) with different rates that obscure actual cost. Tab 2’s effective rate helps you compare regardless of pricing model.
Operating leverage
The effect of fixed costs on profit: when revenue grows, profit grows faster because fixed costs don’t rise proportionally. Improving margin (e.g. fee increases, vendor savings) increases net income and thus enterprise value via the multiple. Tab 1 illustrates this with fee and bundling levers.
DSO (Days Sales Outstanding)
Average days from invoice to payment. Formula: (Total AR ÷ Annual Revenue) × 365. Lower DSO frees cash and reduces carrying cost. Tab 3 compares your DSO to industry median.
Recovery rate
Percentage of billed receivables that are ultimately collected. Each point of improvement adds revenue. Tab 3 shows impact of +2%, +5%, +10% improvement.
All-in 401(k) fee / expense ratio
Total plan fees (fund expense ratios + advisor + recordkeeper + TPA) as a % of assets. Plans above ~1% are often considered high cost. Tab 4 shows 10/20/30-year fee drag vs. a lower-cost benchmark.
Fiduciary duty
Plan fiduciaries must ensure 401(k) fees are reasonable. Benchmarking and fee disclosure (e.g. 408(b)(2)) support this. Tab 4 helps compare your benefits cost per employee to industry.
AHT (Average Handle Time)
Average time per contact (start to wrap-up). Used with headcount and hours to compute capacity. Tab 5 uses AHT to model how many human agents are needed after AI offload.
AI containment rate
Of contacts routed to AI, the share resolved without human escalation. Tab 5 models Conservative / Moderate / Aggressive scenarios with different containment assumptions.
Glossary — Laravel

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Key Terms

Back to Calculator

Definitions and links to the calculator tabs where each concept is used.

Enterprise Value (EV)
The total value of a business (equity + debt − cash). In practice, often approximated as net income (or EBITDA) × a valuation multiple. Used in Tab 1.
EBITDA
Earnings before interest, taxes, depreciation, and amortization. A proxy for operating cash flow; multiples (e.g. EV/EBITDA) are commonly applied to it for valuation. Tab 1 uses net income as the multiple base.
Valuation multiples
Ratios (e.g. EV/EBITDA, P/E) used to compare businesses. Industry medians from comparable companies determine typical “×” (e.g. 6× EBITDA). Tab 1 lets you select industry and apply an optional private-company discount.
Multiplier effect
A dollar of extra net income increases enterprise value by that dollar × the multiple (e.g. $100K at 6× = $600K EV increase). Tab 1 shows how fee increases and bundling flow through to EV.
Effective processing rate
Total payment processing fees ÷ total card/volume. The single number that matters when comparing processors. Tab 2 compares your rate to an industry-best benchmark.
Surcharging / cash discount
Compliant programs that pass card processing costs to customers (surcharge) or offer a discount for cash. Tab 2 models potential savings if you don’t currently use them.
Interchange-Plus vs. tiered pricing
Interchange-Plus passes through card network interchange plus a stated markup, so you see true cost. Tiered pricing groups transactions into buckets (e.g. “qualified,” “mid-qualified,” “non-qualified”) with different rates that obscure actual cost. Tab 2’s effective rate helps you compare regardless of pricing model.
Operating leverage
The effect of fixed costs on profit: when revenue grows, profit grows faster because fixed costs don’t rise proportionally. Improving margin (e.g. fee increases, vendor savings) increases net income and thus enterprise value via the multiple. Tab 1 illustrates this with fee and bundling levers.
DSO (Days Sales Outstanding)
Average days from invoice to payment. Formula: (Total AR ÷ Annual Revenue) × 365. Lower DSO frees cash and reduces carrying cost. Tab 3 compares your DSO to industry median.
Recovery rate
Percentage of billed receivables that are ultimately collected. Each point of improvement adds revenue. Tab 3 shows impact of +2%, +5%, +10% improvement.
All-in 401(k) fee / expense ratio
Total plan fees (fund expense ratios + advisor + recordkeeper + TPA) as a % of assets. Plans above ~1% are often considered high cost. Tab 4 shows 10/20/30-year fee drag vs. a lower-cost benchmark.
Fiduciary duty
Plan fiduciaries must ensure 401(k) fees are reasonable. Benchmarking and fee disclosure (e.g. 408(b)(2)) support this. Tab 4 helps compare your benefits cost per employee to industry.
AHT (Average Handle Time)
Average time per contact (start to wrap-up). Used with headcount and hours to compute capacity. Tab 5 uses AHT to model how many human agents are needed after AI offload.
AI containment rate
Of contacts routed to AI, the share resolved without human escalation. Tab 5 models Conservative / Moderate / Aggressive scenarios with different containment assumptions.