FBLA Terms

Income Statement

Shows a company’s revenues, expenses, and profitability over a period of time.

Revenue (Sales)

Total income earned from selling goods or services before expenses.

Cost of Sales (COGS)

Direct costs required to produce goods sold, including food, beverage, and packaging.

Operating Expenses

Costs to run the business that are not directly tied to production, such as labor, rent, utilities, and marketing.

Operating Income

Profit earned from core operations before interest and taxes.

Operating Margin

Operating income ÷ revenue; measures operating efficiency and profitability.

Net Income (Net Earnings)

Profit remaining after all expenses, interest, and taxes.

Net Profit Margin

Net income ÷ revenue; shows how much profit is generated per dollar of sales.

Earnings Per Share (EPS)

Net income ÷ shares outstanding; measures profit allocated to each share.

Balance Sheet

Shows assets, liabilities, and shareholders’ equity at a specific point in time.

Assets

Resources owned by a company that provide future economic value.

Total Assets

The sum of all current and long-term assets.

Current Assets

Assets expected to be converted into cash within one year.

Inventory

Goods held for sale; for Chipotle, kept low due to the fresh-food model.

Cash and Restricted Cash

Cash available for operations and cash set aside for specific purposes.

Liabilities

Obligations the company owes to others.

Current Liabilities

Obligations due within one year.

Long-Term Debt

Borrowed money due after one year.

Operating Lease Obligations

Long-term rental commitments for restaurant locations.

Liquidity

The ability to meet short-term financial obligations.

Current Ratio

Current assets ÷ current liabilities; measures short-term liquidity.

Working Capital

Current assets minus current liabilities.

Solvency

Ability to meet long-term obligations and remain financially stable.

Capital Structure

The mix of debt and equity used to finance the business.

Conservative Capital Structure

Reliance on internal cash rather than heavy borrowing.

Financial Risk

Risk related to debt levels and the ability to meet obligations.

Cash Flow Statement

Shows actual cash inflows and outflows from operations, investing, and financing.

Operating Cash Flow (OCF)

Cash generated from core business operations.

Investing Cash Flow

Cash used for or generated by investments like new restaurants or equipment.

Financing Cash Flow

Cash related to share repurchases, debt, or equity transactions.

Cash-Backed Earnings

Earnings supported by real cash, not just accounting profits.

Comparable Restaurant Sales (Same-Store Sales)

Sales growth from locations open at least one year; measures organic growth.

Organic Growth

Growth from existing operations, not expansion.

Revenue Growth Rate

Percentage increase in revenue year over year.

Efficiency

How well the company converts revenue into profit and cash.

Operational Efficiency

Effectiveness in managing costs and operations.

Operational Leverage

Ability to grow profits faster than revenue.

Fast-Casual Industry

Restaurant segment between fast food and casual dining.

Benchmark

Industry standard used for comparison.

Industry Average

Average performance across competitors.

Margin Compression

Decline in profit margins due to rising costs.

Competitive Positioning

How a company performs relative to competitors.

Restaurant-Level Margin

Profitability at the individual restaurant level.

Shareholders’ Equity

Residual value after liabilities; reflects retained earnings and capital returns.

Retained Earnings

Cumulative profits kept in the business.

Share Repurchases (Stock Buybacks)

Company buys back its own shares, reducing shares outstanding.

Capital Allocation

How cash is used: reinvestment, debt reduction, or shareholder returns.

Pricing Power

Ability to raise prices without losing demand.

Brand Elasticity

Customer willingness to absorb price increases.

SEC Filings

Required financial reports filed with the U.S. Securities and Exchange Commission.

Form 10-K

Annual, audited financial report used as your primary data source.

SEC-Reported Data

Official, audited financial information.

Earnings Quality

How sustainable and cash-backed earnings are.

Financial Flexibility

Ability to respond to economic changes without stress.

Risk Mitigation

Actions taken to reduce financial risk.

Execution Risk

Risk from rapid expansion or operational complexity.

Sustainable Growth

Growth that can be maintained long-term without harming finances.