Business and finance — C1

The vocabulary of American business is one of the densest registers in English. A Wall Street Journal front page or a Bloomberg terminal headline can pack ten or twelve technical terms into three sentences, and at C1 you should be able to parse them in real time. This lesson is built around the major language clusters: how companies make money, how they raise capital, how they merge, how they manage risk, how markets behave, and how the supply chain breaks.

A note on register. American business English is more direct and less Latinate than its British counterpart — we lost money rather than we incurred a loss, the deal fell apart rather than the transaction collapsed. But once you move into financial reporting or legal documents, the register shifts upward sharply: EBITDA adjusted for restructuring charges and stock-based compensation came in below consensus. C1 fluency is the ability to switch between these registers as the context demands.

If you work in or around a US company, especially a public one or a venture-backed startup, this is the survival vocabulary.

How companies make money: the income-statement vocabulary

• revenue / top line — gross sales (Q3 revenue grew 18 percent)
• top-line growth — revenue growth
• bottom line / net income / net earnings — what’s left after all costs
• gross profit — revenue minus the direct cost of goods sold (COGS)
• gross margin — gross profit as a percentage of revenue
• operating income / operating profit / EBIT — earnings before interest and tax
• EBITDA — earnings before interest, tax, depreciation, and amortization; the favored metric for comparing operating performance across companies
• adjusted EBITDA — EBITDA with one-time items stripped out (a number to watch with skepticism)
• non-GAAP — adjusted metrics that don’t follow Generally Accepted Accounting Principles
• GAAP — the official accounting standard in the US
• operating expenses / opex — the running costs of the business
• capital expenditures / capex — spending on long-term assets (data centers, buildings, equipment)
• R&D — research and development; a major expense line for tech and biotech
• SG&A — Selling, General, and Administrative expenses; the “overhead” line
• cost of revenue / COGS — direct costs of producing what you sell
• cash flow — actual cash moving in and out, distinct from accounting profit
• free cash flow (FCF) — operating cash flow minus capex; what a company can actually distribute to investors
• burn rate — how fast a startup is losing money
• runway — how long the current cash will last at the current burn

A real-style sentence: Stripe’s S-1, when it eventually files, will be scrutinized less for top-line growth — which has been steady — than for whether the company’s free cash flow finally turns durably positive, the metric that distinguishes a mature payments platform from a still-subsidized one.

Margins and unit economics

• profit margin — profit as a percentage of revenue
• gross margin — gross profit ÷ revenue
• operating margin — operating profit ÷ revenue
• net margin — net income ÷ revenue
• high-margin / low-margin — the per-unit profitability
• margin pressure / margin compression — margins shrinking
• margin expansion — margins growing
• unit economics — the per-customer or per-transaction profitability
• CAC (customer acquisition cost) — what it costs to acquire one customer
• LTV (lifetime value) — total expected revenue from one customer
• LTV / CAC ratio — the central SaaS health metric (3x or higher is healthy)
• payback period — how long until CAC is recouped
• ARPU (average revenue per user) — common in consumer tech
• gross merchandise value (GMV) — the total value of goods sold on a marketplace (not the marketplace’s revenue)
• take rate — the marketplace’s percentage cut
• commoditization — when a product becomes interchangeable, crushing margins
• pricing power — the ability to raise prices without losing customers

ROI, NPV, and the investment-decision vocabulary

• ROI (return on investment) — gain or loss relative to investment cost
• ROIC (return on invested capital) — a more rigorous corporate-finance version
• IRR (internal rate of return) — the annualized return rate of an investment
• NPV (net present value) — the discounted value of future cash flows
• hurdle rate — the minimum return required to undertake an investment
• cost of capital — what funding costs the company (debt + equity weighted)
• WACC (weighted average cost of capital) — the formal version
• payback period — time to recover the initial investment
• discount rate — the rate used to value future cash flows in today’s dollars
• time value of money — the principle that a dollar today is worth more than a dollar tomorrow
• opportunity cost — what you give up by choosing one path over another

Raising capital: the IPO and funding-round vocabulary

• bootstrapped — funded from revenue and founders’ money, no outside capital
• seed round — the earliest institutional money
• Series A / B / C / D — successive rounds of venture capital
• bridge round — interim funding between rounds
• down round — funding at a lower valuation than the previous round
• up round — funding at a higher valuation
• flat round — same valuation
• valuation — the company’s price tag
• pre-money valuation vs post-money valuation — before vs after the new investment
• dilution — reduction in your ownership percentage from new shares
• anti-dilution provision — investor protections against dilution
• liquidation preference — investor’s order in the payout line during a sale
• participating preferred — investor gets both their preference and their pro-rata share
• cap table — the ownership structure document
• unicorn — private company valued at $1B or more
• decacorn — $10B+
• IPO (initial public offering) — going public on a stock exchange
• S-1 — the registration document filed with the SEC for an IPO
• roadshow — pre-IPO investor pitch tour
• bookbuilding — collecting institutional orders before pricing
• pop — the first-day price jump (often viewed as money “left on the table”)
• lock-up period — typically 180 days where insiders can’t sell
• direct listing — going public without raising new capital (Spotify, Coinbase used this)
• SPAC (Special Purpose Acquisition Company) — a shell company that goes public to later acquire a real company; mostly out of favor after 2022
• secondary offering — selling more shares after the IPO
• buyback / share repurchase — company buying back its own shares

A real-style sentence: After a roadshow that emphasized free cash flow and unit economics over growth-at-all-costs, the company priced its IPO at the high end of the range and saw a modest first-day pop — a controlled debut that contrasted sharply with the chaotic 2021 listings the bankers were eager to put behind them.

Mergers, acquisitions, and the M&A vocabulary

• M&A — mergers and acquisitions
• acquirer vs target — buyer vs the company being bought
• strategic acquirer — buying for synergy with existing business
• financial acquirer — private equity, buying as an investment
• friendly takeover vs hostile takeover
• tender offer — direct offer to shareholders
• hostile bid — a bid the target’s board opposes
• poison pill — a defensive measure that makes a hostile takeover prohibitively expensive
• white knight — a friendlier acquirer brought in to outbid a hostile one
• golden parachute — large severance for executives in a takeover
• earnout — additional payment if the acquired company hits targets post-deal
• stock-for-stock vs all-cash deal — how the acquisition is paid for
• synergies — the supposed cost savings or revenue gains from combining (often overstated)
• antitrust — laws preventing anti-competitive concentration
• FTC (Federal Trade Commission) / DOJ (Department of Justice) — the US antitrust regulators
• HSR filing — pre-merger notification under the Hart-Scott-Rodino Act
• divestiture — selling off a business unit
• spin-off — separating a unit into an independent public company
• carve-out — selling part of a business
• integration / post-merger integration (PMI) — combining the companies after the deal closes
• culture clash — the soft-but-often-fatal post-merger problem

Due diligence and deal-making vocabulary

• due diligence / DD — the pre-deal investigation
• data room — the secure repository of documents reviewed during DD
• LOI (letter of intent) — non-binding statement of intent to deal
• term sheet — outline of deal terms
• definitive agreement — the binding final contract
• closing — when the deal officially completes
• closing conditions — what must be true for the deal to close
• MAC clause (material adverse change) — escape hatch if something major changes
• break fee / termination fee — payment if a party walks away
• regulatory approval — government clearance required to close
• redlines — the marked-up version of a contract showing changes
• representations and warranties / reps and warranties — promises about the company’s state
• indemnification — promise to cover certain post-close losses
• escrow — money held back pending resolution of post-close issues
• walk-away price — the maximum you’d pay (or minimum you’d accept)

Markets, leverage, and risk

• bull market — sustained rising market
• bear market — sustained falling market (technically a 20 percent drop from highs)
• correction — a 10 percent drop
• crash — a sudden, severe drop
• rally — a sustained rise after a fall
• volatility / vol — the degree of price fluctuation
• VIX — the volatility index; nicknamed the fear gauge
• liquidity — how easily an asset can be sold without moving the price
• illiquid — hard to sell quickly
• leverage / financial leverage — using debt to amplify returns
• leveraged (adj) — using significant debt (a highly leveraged company)
• LBO (leveraged buyout) — a PE acquisition financed mostly with debt
• deleveraging — reducing debt
• hedge (verb) — offset a risk with a counterbalancing position
• hedge (noun) — the counterbalancing position
• hedge fund — actively managed pool that uses hedging, leverage, and short-selling
• short (verb) — bet that a price will fall
• short squeeze — when shorts are forced to buy, accelerating the price up (GameStop 2021)
• margin call — a demand to deposit more collateral when leveraged positions lose value
• systemic risk — risk to the financial system as a whole
• counterparty risk — risk that the other party defaults
• default — failure to meet a debt obligation

A real-style sentence: When the regional banks went into crisis in March 2023, the chain of failures exposed the systemic risk lurking in held-to-maturity bond portfolios; Silicon Valley Bank’s collapse wasn’t a credit problem but a duration mismatch, made fatal by a depositor run that destroyed liquidity overnight.

SaaS, subscription, and churn vocabulary

• SaaS — Software as a Service
• ARR (annual recurring revenue) — annualized subscription revenue
• MRR (monthly recurring revenue) — monthly version
• NRR / net retention rate — revenue retained from existing customers (including upsells)
• GRR / gross retention rate — revenue retained excluding upsells
• churn — customers leaving
• churn rate — percentage of customers (or revenue) lost per period
• logo churn — losing customer accounts (regardless of size)
• revenue churn — dollar churn
• negative churn — when upsells exceed cancellations
• expansion revenue — additional revenue from existing customers
• upsell / cross-sell — selling more / different to existing customers
• PLG (product-led growth) — letting the product drive adoption (Notion, Figma)
• bottoms-up adoption — starting with individual users, then converting to enterprise
• enterprise vs SMB — large companies vs small/medium businesses
• POC (proof of concept) — a trial deployment
• annual contract value (ACV) — value of a typical contract
• deal velocity — how fast deals close

Supply chain, operations, and the post-2020 vocabulary

• supply chain — the end-to-end production and distribution network
• supply-chain disruption — what happened in 2020-2022
• just-in-time (JIT) — minimal inventory, delivered as needed
• just-in-case — the post-pandemic shift toward buffer inventory
• reshoring / onshoring — bringing production back to the US
• nearshoring — moving production to nearby countries (Mexico for the US)
• friend-shoring — shifting to allied countries
• decoupling — separating from a particular country (used about China)
• de-risking — the milder version of decoupling
• bottleneck — the choke point limiting throughput
• chip shortage — the semiconductor crisis of 2020-2022
• vendor / supplier — your inputs
• OEM (original equipment manufacturer) — the actual maker
• white-label — generic product rebranded by the seller
• logistics — the movement of goods
• 3PL (third-party logistics) — outsourced logistics providers
• fulfillment — order processing and shipping
• inventory turnover — how fast inventory sells
• days sales outstanding (DSO) — how long it takes to collect from customers

AmE-specific business vocabulary

Collocations and high-frequency phrases

• post / report / announce earnings / a loss / record results
• beat / miss / meet estimates / expectations / consensus
• raise / lower / withdraw guidance
• gain / lose / capture market share
• launch / unveil / roll out a product
• close / sign / walk away from a deal
• conduct / complete / fail due diligence
• bring in / generate / book revenue
• expand / compress / pressure margins
• service / restructure / default on debt
• the deal fell apart / went south / collapsed
• the market is pricing in a rate cut / a recession / good news
• the stock is trading at a discount / a premium
• the company is bleeding cash / burning cash
• the company is profitable / cash-flow positive / break-even
• at scale / scale (up) the business

Common Russian-speaker mistakes

1. Profit used loosely*. In English profit has specific meanings: gross profit, operating profit, net profit. Russian прибыль gets used generically. Saying the company made a 200-million profit without specifying which line is ambiguous; in serious context, name the line: net income of $200 million or operating profit of $200 million.
2. Economy for savings (calque of экономия). English economy means the broader system (the US economy); savings or cost savings is what экономия usually translates to in business contexts. We achieved an economy of 10 million should be we achieved cost savings of 10 million or we saved 10 million.
3. Actual for current (false friend). Russian актуальный maps to current, relevant, up-to-date, timely — not to English actual, which means real, factual (often in contrast to apparent). Our actual revenue is X in English means X is what we actually earned, not X is our current revenue. For the Russian sense, say current revenue, latest revenue, year-to-date revenue.
4. Realize a project (calque of реализовать). English realize typically means understand or make happen as wealth (realize a gain). For Russian реализовать проект, the AmE phrasing is execute, deliver, implement, carry out a project. We realized the project on time sounds translated; we delivered the project on time is native.
5. Solid used too broadly. Russian speakers often translate солидный as solid, but in business English solid has a specific connotation: reliable, sound, dependable (solid earnings, a solid hire). A solid company is reliable, not necessarily prestigious or large. For солидный meaning large/prestigious, the right word is major, prominent, established, well-regarded.
6. Capital used for capital city in business contexts. Capital in business English means money / financial resources or a city of significance (Wall Street is the financial capital of the US). For столица, the AmE word is capital (no extra word needed) — Washington, D.C., is the capital. Watch the disambiguation when both meanings could apply in a sentence.
7. Firm and company used interchangeably. In US business English, firm has a slight bias toward professional services (a law firm, a consulting firm, an accounting firm, an investment firm); company is the general term that covers everything else. Calling Apple a firm is not wrong, but it’s slightly off-register; native AmE writers say Apple, the company or the iPhone maker.

Summary

• The income statement: revenue (top line) → COGS → gross profit/margin → opex → operating income (EBIT) → net income (bottom line); EBITDA, adjusted EBITDA, free cash flow.
• Unit economics: CAC, LTV, payback period, ARPU, GMV, take rate.
• Capital: bootstrapped, seed, Series A/B/C, IPO, S-1, roadshow, lock-up, direct listing, SPAC.
• M&A: acquirer / target, friendly vs hostile, poison pill, due diligence, term sheet, definitive agreement, antitrust, synergies.
• Markets: bull/bear, volatility, leverage, hedge, LBO, short, margin call, systemic risk.
• SaaS: ARR, MRR, NRR, churn, expansion revenue, PLG.
• Supply chain: JIT vs just-in-case, reshoring, friend-shoring, decoupling, bottleneck.
• Avoid: vague profit, economy for savings, actual for current, realize for execute, solid misuse.

Next theme: Politics and society — C1 — democracy and autocracy, partisan vs bipartisan, gerrymandering, lobbying, filibuster, impeachment, civil liberties, polarization, populism.