CASE LOG · WORD BANK
Words that make the numbers mean something
Thirty-six casing terms in five groups, each with a plain definition and the sentence a caser would say aloud, then fourteen verbs that describe how a business changes. The example numbers come from the worked case on the case log: 1,500 seats, $22.8M of revenue, about $18M of profit, a $2.4M one-time switching cost and a four-year payback.
Industry terms, sourced, live in the framework and industry library →
36 terms · 14 verbs
Thirty-six terms
Each card gives the plain meaning first, then the sentence as it sounds in the room.
Economics of a unit
What one seat, one order or one customer earns and costs.
contribution margin
What one extra sale leaves over after the costs that only exist because of that sale.
In a case
Every extra seat we fill contributes almost its full ticket price, because the show costs about the same whether the seat is empty or not.
fixed versus variable cost
Fixed costs stay the same whether you sell one unit or a thousand; variable costs rise with every unit sold.
In a case
The $4.8M of annual cost looks mostly fixed, so I would expect profit to swing almost one for one with ticket revenue.
unit economics
The money made and spent on one unit, such as one seat, one customer or one order.
In a case
Let me work per seat first: 1,500 seats and $22.8M of revenue is about $15,000 of revenue per seat per year.
break-even
The point where total revenue equals total cost, so profit is zero.
In a case
With $4.8M of mostly fixed cost, break-even is roughly a fifth of today's revenue, so the show is well past it.
payback period
How long it takes for the yearly gain from a decision to repay its one-time cost.
In a case
A $2.4M one-time switching cost against $0.6M more profit a year is a four-year payback, which is longer than the client's one-year horizon.
NPV in plain words
Today's value of all the future cash a decision brings in, minus what it costs now, with later money counting for less.
In a case
Even before discounting, $0.6M a year for four years only just covers the $2.4M up front, so the net present value is close to zero or below it.
hurdle rate
The minimum return a company insists on before it will spend money on a project.
In a case
I would ask what return the client needs on the $2.4M before I call a four-year payback good or bad.
opportunity cost
What you give up by choosing one option over the next best one.
In a case
The opportunity cost of keeping the current show is the extra $0.6M a year the alternative would earn.
sensitivity
How much the answer changes when one input changes.
In a case
The recommendation is sensitive to the switching cost: at $1.2M instead of $2.4M the payback drops to two years.
Market
Who could buy, who already does, and how price changes that.
addressable market
All the customers who could realistically buy what you sell, counted in people or in dollars.
In a case
The addressable market here is visitors who would attend a show on a given night, not everyone in the city.
penetration
The share of possible customers who already buy from you.
In a case
If one in ten hotel guests already attends, penetration is 10 percent and the question is who the other nine are.
share
Your slice of all the sales in a market, usually as a percentage.
In a case
Before I assume growth comes from share, I want to know whether the market itself is growing.
elasticity
How much demand changes when price changes; elastic demand drops fast, inelastic demand barely reacts.
In a case
The premium seats sell out while the cheapest section is half full, which tells me demand at the top is inelastic.
pricing power
The ability to raise prices without losing many customers.
In a case
A sold-out premium section is a sign of pricing power, so the first thing I would test is price, not volume.
willingness to pay
The most a customer would hand over for something before walking away.
In a case
I would test willingness to pay in the premium section before adding seats, because a sellout says the price could be higher.
switching cost
What it costs a customer or a company to change from one option to another, in money, time or hassle.
In a case
The $2.4M one-time switching cost is what makes the alternative a four-year decision rather than a one-year one.
cohort
A group of customers who started at the same time, followed together to see how they behave.
In a case
If I split guests by the month they first attended, I can see whether newer cohorts come back less often.
churn
The share of customers who stop buying in a period.
In a case
A subscription business with 5 percent monthly churn loses almost half its customers in a year, so keeping them matters more than finding new ones.
Operations
How much a business can produce and where it gets stuck.
utilization
How much of what you could produce or sell you actually do, as a percentage.
In a case
Premium seats are at full utilization and the cheapest section is at 50 percent, so the room is not the constraint, the seat mix is.
capacity
The most a business can produce or serve in a period with what it already has.
In a case
Capacity is 1,500 seats a show, so any growth plan has to come from price, seat mix or more shows.
throughput
How many units get through a process in a given time.
In a case
If the bottleneck is the box office, throughput is tickets scanned per minute, not seats in the room.
bottleneck
The one step in a process that limits everything behind it.
In a case
Adding seats does nothing if the bottleneck is the number of nights the theater is available.
lead time
The wait between asking for something and getting it.
In a case
A twelve-week lead time on new seating means a change made now does not show up in this quarter's numbers.
run-rate
Taking the current pace and stretching it over a full year.
In a case
At the current run-rate, $1.9M a month is about $22.8M a year.
working capital
The cash tied up in running the business day to day: inventory and money owed to you, minus money you owe.
In a case
Tickets are paid up front, so working capital is low and growth does not need much cash to fund it.
Comparisons
Making two numbers honest before putting them side by side.
like-for-like
Comparing only the things that existed in both periods, so the change is real and not the result of adding or removing items.
In a case
On a like-for-like basis, same shows and same seats, revenue grew 3 percent; the rest came from the extra nights.
same-store
Growth measured only at locations open in both periods, the retail version of like-for-like.
In a case
Same-store sales are flat, so the chain's growth is entirely new openings.
mix shift
A change in the blend of what is sold, which changes the average even if every price stays the same.
In a case
Average ticket price rose because more premium seats sold, a mix shift, not a price increase.
lap
To pass the anniversary of a one-time event, so it drops out of the year-on-year comparison.
In a case
Next quarter we lap last year's price increase, so growth will look slower even if nothing changes.
baseline
The starting number everything else is measured against.
In a case
The baseline is about $18M of annual profit; every option is a change from that figure.
delta
The difference between two numbers.
In a case
The delta between the two options is $0.6M a year in favor of the alternative.
order of magnitude
Roughly how big a number is, in powers of ten; $2M and $20M are an order of magnitude apart.
In a case
Before the exact math, the one-time cost is in the single-digit millions and profit is in the tens of millions, so the switch is affordable.
Deals
The four words that come up when one company buys another.
synergies
Savings or extra revenue that only exist because two businesses are combined.
In a case
I would separate cost synergies, such as one shared box office, from revenue synergies, which are harder to prove.
accretive
A deal that raises earnings per share for the buyer.
In a case
The acquisition is accretive in year one only if the target's earnings beat the cost of financing it.
dilutive
A deal that lowers earnings per share for the buyer, at least at first.
In a case
Paying in new shares makes the deal dilutive until the synergies show up.
earn-out
Part of a purchase price paid later, only if the business hits agreed targets.
In a case
An earn-out shifts some of the risk back to the seller if the show's attendance does not hold up.
Nothing matches that search. The box looks inside each term, its plain definition and its case sentence.
Verbs that narrate a business
A caser who says revenue is eroding, or that the second show would cannibalize the first, is describing a dynamic in one word. Each verb below names the dynamic, shows the sentence, and says when it fits.
cannibalize
A new offer takes sales from one you already have.
In a case
A second nightly show could cannibalize the first if the same guests just pick a different time.
Fits when: A launch, a new location or a cheaper tier sits next to something already on sale.
ramp
Output or sales rise over time toward full speed instead of arriving all at once.
In a case
The new seating will ramp over two quarters, so year one captures maybe half the gain.
Fits when: Something new needs time before it performs at its planned level.
saturate
A market fills up; each extra dollar of effort brings fewer new customers.
In a case
If every hotel guest who wants a show already attends, the local market is saturated and growth has to come from price.
Fits when: Growth slows while spending does not.
erode
A margin, a share or a price wears away slowly rather than dropping at once.
In a case
Discounting the cheap section fills seats but erodes the average ticket price.
Fits when: The trend is steady and downward, not a single event.
offset
One change cancels part or all of another.
In a case
Higher ticket prices offset the lost volume, so revenue holds even with fewer guests.
Fits when: Two effects pull in opposite directions and the net is what matters.
compound
Growth builds on growth; each year's gain is calculated on a larger base.
In a case
At 10 percent a year, revenue compounds to about a third higher after three years, not 30 percent.
Fits when: A rate applies over several periods in a row.
backfill
Something new replaces what was lost, so the total holds.
In a case
If premium guests trade down after a price rise, we need new guests to backfill the premium rows.
Fits when: Demand or staff leaves and the question is what fills the gap.
flatten
A rising line stops rising and goes level.
In a case
If attendance has flattened, the question shifts from filling seats to earning more per seat.
Fits when: Growth has ended but nothing has declined yet.
lap
A past one-time event reaches its anniversary and leaves the year-on-year comparison.
In a case
Once we lap the price increase, reported growth will fall back to volume growth alone.
Fits when: Last year had a one-off that distorts this year's comparison.
absorb
A business takes a cost or a shock onto itself instead of passing it on.
In a case
The theater can absorb a $2.4M one-time cost out of about $18M of annual profit without borrowing.
Fits when: A cost lands and the question is who carries it.
pass through
A cost increase is handed to the customer as a higher price.
In a case
If venue fees rise 5 percent, can we pass that through to ticket prices without emptying the cheap section?
Fits when: Input costs change and pricing power decides who pays.
decouple
Two things that used to rise and fall together stop doing so.
In a case
Profit has decoupled from attendance because the premium mix is doing the work.
Fits when: A familiar relationship between two numbers breaks.
re-base
Reset the starting point so future comparisons use a new, honest baseline.
In a case
After the switch, I would re-base the profit line at $18.6M and measure growth from there.
Fits when: A structural change makes the old baseline misleading.
stabilize
A falling or swinging number settles at a level.
In a case
If revenue has stabilized at about $22.8M, the one-year horizon is a fair test of the alternative.
Fits when: The decline has stopped and the question is what to build on.