Adlega Blog:
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Cash Runway: Formula & How to Calculate It (with Example)
What Is Cash Runway? Cash Runway represents the amount of time a company can continue operating before it runs out of cash, based on its current cash reserves and burn rate . It’s like calculating how many more months your business can survive before needing additional funding or becoming profitable. What’s Included in Cash Runway?…
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Net Burn Rate
What Is Net Burn Rate? Net Burn Rate represents how much money a company is losing (or gaining) each month after considering both expenses and revenue . It’s like your actual cash flow scorecard, showing the real rate of cash depletion. What’s Included in Net Burn Rate? 💼 All Expenses ( Gross Burn ): Operating…
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Gross Burn Rate
What Is Gross Burn Rate? Gross Burn Rate represents the total amount of money a company spends each month before factoring in any revenue . What’s Included in Gross Burn Rate? 💼 Operating Expenses : Employee Costs: Salaries and wages Benefits and payroll taxes Contractor payments Training and development Facility Costs: Rent Utilities Maintenance Technology…
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Cash Burn Rate: Formula, Gross vs Net & How to Calculate
Cash burn rate is how much cash a company spends per month. Gross burn = total monthly expenses; net burn = expenses minus revenue. Divide your cash balance by net burn to get runway.…
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Assets and Liabilities
What Are Assets and Liabilities? Assets are everything a business owns or controls that has value. Liabilities are everything a business owes to others. It’s like comparing your belongings (assets) to your debts (liabilities) to understand your financial position. What’s Included in Assets and Liabilities? Assets Current Assets: Cash Inventory Accounts receivable Short-term investments Prepaid…
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Equity: Definition, Formula & Types (Owner's & Shareholders')
In business and accounting, equity is the value left for owners after subtracting liabilities from assets. The formula is Equity = Total Assets − Total Liabilities. It represents the owners' stake in the company.…
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Liquidity
What Is Liquidity? Liquidity represents how easily assets can be converted into cash without significantly losing value. It’s like having different types of money: cash in hand, funds in a checking account, or money tied up in long-term deposits. What’s Included in Liquidity? Liquidity typically includes assets grouped by their ease of conversion into cash:…
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Cumulative Gain (Loss)
What Is Cumulative Gain (Loss)? Cumulative Gain (Loss) represents your total profit or loss picture over time. It’s like keeping a running score of your financial performance, adding each new result to the previous total to see your overall progress. How to Track Cumulative Gain (Loss) Tracking cumulative gain (loss) involves these simple steps: Start…
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Fundraising
What is Fundraising? Fundraising is the process of collecting money to finance your business initiatives. It’s how companies get the resources they need to grow, develop products, or expand into new markets. Types of Fundraising Equity Fundraising: Selling shares of your company Debt Fundraising: Taking loans or issuing bonds Grant Fundraising: Getting money that doesn’t…
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Operating Cash Flow (OCF): Formula, Definition & Why It Matters
Operating cash flow (OCF) is the cash a business generates from its regular operations. It's calculated as Net Income + Non-cash Expenses ± Working Capital Changes. Unlike profit, it shows real cash moving through the business.…
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Paid Media: Definition, Types, Examples & Benefits
Paid media is any marketing channel you pay for directly: search ads, social ads, display ads, and sponsored content. It's one of the three media types alongside owned media (your channels) and earned media (publicity you don't pay for).…
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Influencer Marketing
What is Influencer Marketing? Influencer marketing is when brands collaborate with social media personalities (influencers) to promote products or services. Think of influencers as modern-day word-of-mouth advertisers, sharing brand messages with their engaged followers. Who is an Influencer? An influencer is someone with the ability to affect other people’s purchase decisions due to their: Knowledge…