Finance glossary.
The dictionary for people who work with money every day.

Sending many Pix transactions in a single instruction, from a file or an integration, rather than one at a time on screen. It is the format used by anyone paying hundreds of suppliers or making daily payouts.

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The situation where goods never arrived, a service was not delivered, or quality fell short of what was agreed. This is not grounds for MED, and it is one of the most common misunderstandings among sellers: the mechanism covers fraud and operational error, not dissatisfaction with a purchase.

Using Pix by tapping a phone on a terminal, with the same gesture as a contactless card. It changes the experience at the point of sale, not the nature of the transaction: it is still Pix, settled in seconds and credited straight to the account.

The transactional account identifier directory, maintained by the Central Bank. It is the central registry that links each Pix key to the corresponding account. When someone types a key and sees the recipient's name before confirming, that information came from DICT.

A code generated once per charge, with its own amount, due date and identifier. It is the format that lets you know exactly which invoice was paid, without relying on the customer to tell you. For anyone reconciling at volume, the difference between static and dynamic is the difference between guessing and knowing.

A unique code that travels with every Pix transaction from start to finish, assigned by the payer's institution. It is the number that allows a specific payment to be traced between institutions, and the field that any discrepancy investigation rests on.

A record an institution files to flag an account or transaction with suspected fraud to the rest of the system. It feeds the risk databases other institutions consult and usually precedes a return claim.

A set of Central Bank rules, in force since November 2021, that allows a Pix to be claimed back in cases of fraud, scam or operational failure by an institution. It is not an automatic chargeback: the payer's and the recipient's institutions analyse the case, block the amount if there is balance, and decide on the return.

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The response available to a business that received a legitimate Pix and had the amount returned wrongly. Under a Central Bank rule in force since September 2026, the window to contest went from 30 to 80 days, counted from the date of the return. For a seller, it is the difference between absorbing the loss and recovering the sale.

Brazil's instant payment system, created by the Central Bank and live since November 2020. It settles transfers in seconds, 24 hours a day, every day of the year, holidays included. Settlement is final: once completed, a transaction is not automatically reversed.

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The mode in which a customer authorises once and the company then charges on a recurring basis, with no new action each cycle. It has been available since June 2025 and was designed for periodic billing such as subscriptions, memberships and ongoing services. Trio covers how it works in Pix Automático: what it is and how it works and its effect on operations in How Pix Automático can transform receivables management.

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The mode in which a company issues a charge with an amount, a due date and the debtor's details, and can apply interest, penalties or discounts depending on the payment date. It is Pix occupying the place that only the boleto used to hold.

The text version of a QR code, used where an image cannot be scanned, such as in an email or a chat. It carries exactly the same information as the matching QR, including the identifier of the charge.

A nickname that identifies an account and replaces bank, branch and account number. It can be a tax ID for an individual (CPF) or a company (CNPJ), an email, a phone number, or a random key generated by the system. One account can hold several keys, and a key can be moved to another institution, which is called portability.

The ceiling each institution sets per transaction and per period, with different rules for daytime and night-time and with customer history and profile taken into account. For companies the limit is usually adjustable, and reviewing it before a large payment avoids a surprise at 5pm.

An institution authorised to offer Pix to customers, whether a bank, a payment institution or a credit union. Direct participants connect to SPI on their own; indirect participants reach the system through a direct participant that settles for them.

An operation in which the recipient gives the money back, in full or in part, on their own initiative. It is not an automatic reversal: it depends on the recipient's willingness and balance, and it links back to the original transaction through the end-to-end identifier.

Modes in which a customer receives physical cash from a merchant, with the amount debited by Pix. Pix Saque is a withdrawal on its own; Pix Troco is cash back alongside a purchase. Rarely relevant in B2B, but common in retail.

A temporary hold on the amount in the destination account while a MED claim is analysed. It reaches only the available balance, which is why the speed of the alert changes the outcome: money already moved on does not come back through a block.

A broader term for any repeated billing arrangement over Pix, including those that predate Pix Automático and relied on the customer paying each cycle.

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A transaction the payer programmes for a future date. The money leaves on the set date, provided there is balance. It is the payer's decision, not a prior arrangement with the recipient, and that distinction matters when comparing it with Pix Automático.

The instant payment system infrastructure operated by the Central Bank, where Pix transactions actually settle, one by one, in real time. DICT says where the money goes; SPI moves the money.

A fixed code that can be printed and reused indefinitely. It usually carries no amount, or always the same amount, and does not identify who paid. Fine for simple situations, but it undermines reconciliation at volume, because several payments arrive looking identical.

The institution that onboards the merchant, captures the card transaction and passes the amount on to the seller. It sits between the terminal and the card networks, and sets part of the settlement timing.

A payment instrument with a barcode and a numeric line, registered in a national database, that can be paid at any institution until its due date. It remains relevant in credit sales and in B2B relationships with negotiated payment terms.

A card purchase dispute opened by the cardholder with the issuer, which can end in the amount being returned to the buyer. It is the card world's closest relative to Pix's MED, and the differences are in the comparison table further down.

A card tied to the company's account, used for operating expenses, with limits by holder and cost centre. The gain is not in the payment itself, it is in knowing who spent what before the statement closes.

A balance held inside a platform that the end user moves to receive, pay or withdraw. Common in marketplaces, affiliate programmes and any platform with frequent payouts.

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A prior authorisation for a company to debit amounts from a customer's account on agreed dates. It is the model Pix Automático reproduces with broader reach, since it does not depend on an agreement between the company and each individual bank.

An account whose movements are tied to contractual conditions, where funds only leave once the agreed rules are met. Frequent in securitisation, structured deals and transactions with collateral.

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A single document carrying both the boleto code and a Pix QR code. The payer chooses how to pay, and the company reconciles both routes against the same charge.

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The technical layer connecting a company's site or system to payment methods, routing transactions and standardising the integration. It does not hold the money, it organises the path it takes.

The set of rules that makes a payment method work across different institutions, defining roles, deadlines and responsibilities. Pix, cards and boletos are each a scheme. It is the invisible contract that gets the money there.

The automatic division of an incoming amount between several recipients at the moment of settlement. It is what lets a marketplace pay the seller and retain its commission with no manual transfer. Note: this is different from tax split payment, described in the regulation section.

A card loaded with balance in advance, with no revolving credit. Useful for team expenses, campaigns and payouts, because exposure is capped at the amount loaded.

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A company that offers payment capture on top of an acquirer's infrastructure, usually adding services such as split and advance funding. For the merchant the experience is the same; the difference is in the chain behind it.

Technology that turns an NFC phone into a payment terminal, with no physical card reader. It cuts cost and rollout time for operations with staff in the field.

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The electronic wire transfer that only runs on business days and within banking hours. Pix replaced it in most cases; it survives in specific operations, usually high value or tied to legacy treasury routines.

An identified sub-account inside a main account, used to separate balances by client, business unit, project or partner. It solves traceability without forcing a bank account to be opened for every entity.

The transfer of the right to receive from one party to another. It is the legal instrument behind receivables advances, securitisation and portfolio sales.

The number of days between paying the supplier and being paid by the customer. The longer it is, the more capital a company must tie up simply to keep operating at the same size.

A Brazilian credit instrument issued from a credit sale or a service rendered, formalising the right to receive. It is the document that has historically underpinned receivables financing in Brazil.

A Brazilian credit rights investment fund, a vehicle that buys receivables with investors' money. It lets a company turn a portfolio into cash with a dedicated risk structure.

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The origin of the money behind a credit operation. Knowing a credit provider's funding helps explain the cost charged and how predictable the offer will be over time.

Amounts the company is owed by customers for sales already made, with a future settlement date. They are an asset, they appear on the balance sheet, and they can be traded.

An operation in which the company receives early, at a discount, an amount it was due to receive later. It is not a loan: the company is bringing forward money that is already its own.

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An authorised entity that records card receivables and other credit rights in a central database, preventing the same receivable from being pledged twice. Registration is what gives legal certainty to an advance.

The set of amounts due spread across time, mostly from card sales. It is the basis for calculating how much comes in each day and how much can be advanced.

A model in which the supplier advances a receivable priced against the credit risk of the buyer, usually a larger company. The cost falls because what underpins the operation is the credit standing of whoever will pay.

The process of turning a pool of receivables into tradable securities. It takes the risk off the originator's balance sheet and distributes it among investors.

The funds needed to sustain operations between paying and getting paid. When the cycle is long, a company can be profitable and still run out of cash.

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The function or routine handling obligations to suppliers, tax authorities and service providers, from approval through to payment. It is where approval controls and internal fraud risk concentrate.

The function or routine tracking what the company is owed, from issuing the charge to closing it out. It is where reconciliation weighs most, because money arrives from many origins.

The rule defining who can approve what, usually by amount, operation type or cost centre. In Trio's platform it appears as an approval rule, and it is the control that stops one person creating and approving the same payment.

The record of who did what, when and from where, inside a financial system. It is what allows an operation to be reconstructed months later without relying on anyone's memory.

The list of money in and out of an account over a period. For reconciliation, what matters is not the closing balance, it is how rich the fields on each entry are.

Running many payments in a single submission, by file or integration, with one approval covering the set. It cuts time and keying errors when daily volume is high.

The projection of money in and out over time, used to know how much will be available on each date. Different from profit: a profitable company can run dry if it is paid later than it pays.

The hour after which an instruction rolls into the next processing cycle. Knowing the cut-off for each payment method avoids promising a payment date the calendar will not honour.

Notation for settlement timing counted in days from the transaction. D+0 means money available the same day, D+30 in thirty days. It is the language used to describe when funds actually become available.

The document that formalises a transaction, with date, amount, parties and identifiers. It is what supports audits, disputes and accountability.

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The process of matching statement entries against internal records of sales, invoices and payments, until every amount has an explained origin. At volume it stops being a spreadsheet task and becomes a question of identifiers.

The internal control principle that separates who enters, who approves and who checks. It is the organisational translation of approval rules: the control lives both in the system and in how the team is designed.

The period in which a system processes and settles transactions. Pix settles continuously; other methods have windows and cut-off times, which is why a transaction at 5:30pm may only land the next day.

The field that links an entry on the statement to an order, contract or invoice in the company's system. In many platforms, Trio's included, it appears as an external ID, supplied when the charge or payment is created and returned on the statement.

Anti money laundering and countering the financing of terrorism. A set of obligations that includes monitoring transactions, assessing customer risk and reporting suspicious activity to the authorities.

The process by which the Central Bank licenses an institution and monitors it afterwards, with capital, governance and reporting requirements. Asking whether a partner is authorised and supervised is basic due diligence.

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The federal contribution on goods and services and the state and municipal tax on goods and services. Together they concentrate consumption taxation under the new model, with a transition running to 2033.

The interbank deposit certificate rate, which tracks Selic closely and is used as a benchmark for returns and costs in financial contracts. When an investment pays "100% of CDI", this is the rate in question.

The authority that regulates and supervises the financial system, operates Pix and authorises institutions to function. It issues the rules cited throughout this glossary.

The name of Brazil's central bank digital currency, in development at the Central Bank, designed to settle operations with records on distributed infrastructure. It remains in testing and is not yet a payment method available to companies.

A company authorised to take deposits and extend credit with its own and third-party funds, under stricter capital rules. The difference from a payment institution lies in what each can do with the money, not in how safe the operation is.

Know Your Customer and Know Your Business procedures, verifying identity, ownership structure and source of funds. They are a regulatory requirement, not optional paperwork.

Brazil's general data protection law, in force since 2020, governing the processing of personal data. It reaches data on individual customers and suppliers that appears in statements, charges and payments.

The system that lets a customer share financial data and initiate payments across institutions, always with explicit, time-limited consent. In Brazil it was rolled out in phases from 2021.

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A company authorised to offer payment accounts, issue instruments and move funds, without intermediating credit through public deposits. Customer funds are segregated from the institution's own assets.

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Brazil's benchmark interest rate, set by the Central Bank's monetary policy committee. It is the reference for the cost of credit and for returns on conservative investments.

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The mechanism by which the tax portion is separated at the moment a payment settles and goes straight to the tax authority, instead of sitting in the company's account until the collection date. It changes cash management, not the rate. Trio covers it in Split Payment: impacts of the tax reform and in Split Payment moves business-to-business obligation to 2028.

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The change replacing Brazil's consumption taxes with two new ones: CBS at federal level and IBS at state and municipal level. It alters calculation, tax documents and, above all, when the tax is collected.

Recording a bond at its agreed return, ignoring market swings. The value climbs smoothly until maturity. It is the opposite of marking to market and applies to whoever intends to hold the paper to the end.

See alsoMark to market

In accounting, money available right now plus investments that turn into cash very quickly and with almost no risk of changing value. It is the line that answers how much the company has on hand if it must pay something today.

See alsoInterest-bearing accountCash flow

A loan you make to a bank: it uses the money to lend to other people and returns yours with interest on an agreed date. It is the most common fixed income product in Brazil and is usually covered by the FGC deposit guarantee.

See alsoFGC (deposit guarantee fund)Floating rate

Real estate and agribusiness receivables certificates. A securitisation company issues them backed by future payments from property or agribusiness, such as instalments on flats already sold. Whoever buys one receives those payments and takes on the risk of the people who owe them.

See alsoSecuritisation companySegregated estate

A debt security issued by a company that is not a bank. Instead of borrowing from a bank, the company borrows straight from investors and commits to paying it back with interest. There is no FGC guarantee, so the risk is the issuing company's.

See alsoInfrastructure debentureCredit rating

A measure of how long, on average, you still have to wait to receive a bond's money. The longer the duration, the more the paper's price swings when interest rates change. It is how you compare the risk of two bonds with different terms.

See alsoMark to market

A fund maintained by the banks themselves that pays investors back if an institution fails, up to a limit per person and per institution. It covers savings accounts, CDBs, LCIs and LCAs, but not investment funds, shares or debentures.

See alsoCDB (bank deposit certificate)LCI and LCA

An investment where you lend money to a bank, a company or the government and know the rule for your return from the start. That rule can be a fixed rate or one that tracks an index, but the return does not swing with the market the way a share price does.

See alsoCDB (bank deposit certificate)Fixed rateFloating rate

An investment whose rate is agreed at purchase and does not change until maturity, say 11% a year. It gives you complete certainty about the final amount; the risk is that market rates rise afterwards and you stay locked into a lower one.

See alsoFloating rateHybrid bond

An investment whose return tracks an indicator that moves over time, usually the CDI or the Selic rate. You do not know the exact final amount, but the return rises when the country's interest rates rise.

See alsoCDISelicFixed rate

An investment combining both logics: it pays an inflation index plus a fixed rate, such as IPCA + 6% a year. The index part protects against rising prices and the fixed part is the real gain above inflation.

See alsoTesouro IPCA+IPCA

A general market price index calculated by the FGV foundation. It leans heavily on wholesale prices and therefore swings more than the IPCA. It became known as the index for rent adjustments, though many contracts now use the IPCA instead.

See alsoIPCA

A debenture issued to fund infrastructure projects such as roads, power or sanitation. To attract investors, the government exempts the return from income tax for individuals.

See alsoDebenture

An account where an idle balance earns automatically, with no need for the holder to move it into an investment. For a company, it is what keeps cash from sitting idle between a receipt and a payment.

See alsoRepurchase agreementCash and cash equivalents

Brazil's official consumer inflation index, calculated by the statistics bureau IBGE from the prices of a basket of goods and services. It is the reference used in contracts, price adjustments and bonds that promise protection against inflation.

See alsoIGP-MTesouro IPCA+

Real estate and agribusiness credit notes. They work like a CDB, except the bank must channel the money into property or agribusiness lending. In exchange, the return is free of income tax for individuals, which usually makes up for a lower headline rate.

See alsoCDB (bank deposit certificate)CRI and CRA

How easily an investment turns into available cash without losing value. Daily liquidity means you can take the money out the same day; a property, at the other end, has low liquidity because it takes months to become cash.

See alsoLock-up periodTesouro Selic

A stretch of time during which the money invested cannot be withdrawn, or can only be withdrawn at the cost of the return. It shows up in longer-dated CDBs and in some funds, and it is what separates a cash reserve from a term investment.

See alsoLiquidity

Updating a bond's price every day to what it would fetch if sold today. This is why a fixed rate bond can show a negative return on a statement without anyone defaulting: hold it to maturity and you still receive what was agreed.

See alsoAccrual accounting (marcação na curva)Duration

The rule where the tax rate falls the longer money stays invested, from 22.5% on withdrawals within 180 days down to 15% beyond 720 days. It applies to most fixed income investments and explains why cashing out early is expensive.

See alsoRegressive IOF

A tax charged only on withdrawals made in an investment's first 30 days, starting at 96% of the return on day one and reaching zero on day thirty. In practice, it is what discourages using fixed income as a current account.

See alsoRegressive income tax

An arrangement where a bank sells a security to a client and commits upfront to buying it back on an agreed date and price, sometimes the next day. Treasuries use it constantly to keep cash earning overnight.

See alsoInterest-bearing account

The gap between two rates, usually between what an institution pays to raise money and what it charges to lend it. It is where much of a bank's revenue comes from, and the same word describes the gap between an asset's buy and sell price.

See alsoCDI

The programme that lets individuals buy Brazilian federal government bonds online, starting from small amounts. In practice you lend money to the government, considered the lowest risk borrower in the country.

See alsoTesouro SelicTesouro IPCA+

A government bond that pays the period's inflation plus a fixed rate agreed at purchase. It protects purchasing power, because the return rises with prices. Sold before maturity, its price fluctuates.

See alsoIPCAHybrid bondMark to market

A government bond whose interest rate is set at purchase and does not change. You know exactly what you will receive at maturity, but if the country's interest rate rises afterwards your bond is worth less to anyone buying it before the term ends.

See alsoFixed rateMark to market

A government bond whose return tracks the Selic rate day by day. It is the closest thing to an account that simply earns: its value barely moves and you can sell at any time without giving up what you have earned. It is the usual choice for cash reserves.

See alsoSelicMark to market

A moment when continuous trading stops and all orders are grouped to form a single price. It happens at the open, at the close and when a security swings too far.

See alsoTrading sessionCircuit breaker

Brazil's stock exchange, based in São Paulo. It is where shares, listed property funds, futures and other assets trade, and it also holds the custody and settlement records for those trades.

See alsoTrading sessionClearing house

A Brazilian Depositary Receipt, a certificate traded on the B3 that represents shares in a foreign company. It lets you invest abroad without opening an account overseas.

See alsoB3

New shares handed to shareholders at no cost, drawn from the company's own profit reserves. It increases the number of shares an investor holds and lowers each one's price in proportion.

See alsoSplit and reverse split

An institution authorised to execute buy and sell orders on the exchange on behalf of clients and to hold their assets. Investors do not deal with the B3 directly; the brokerage does it for them.

See alsoCustodyHome broker

An automatic halt to the whole exchange when the main index falls beyond a threshold in a single day, say 10%. It exists to give people time to think before they keep selling.

See alsoAuctionIbovespa

The structure that guarantees every trade actually settles, delivering the asset to the buyer and the money to the seller. It stands between the two sides so neither depends on the other.

See alsoCustodyB3

A share that carries a vote at the company's general meetings. On the B3 its ticker ends in 3. It is the share for whoever wants a say in decisions, not just in results.

See alsoPreferred share (PN)Tag along

The cum date is the last day you must hold the share to receive a payout. From the ex date, whoever buys no longer receives that payment, and the price usually opens lower by the amount distributed.

See alsoDividends

The service of safekeeping an investor's assets, performed by an authorised institution. Your shares do not sit at the brokerage: they are registered in your name at the B3's central depository.

See alsoBrokerageClearing house

A day trade means buying and selling the same asset within one day. A swing trade means holding for days or weeks. Each has its own tax rules, and day trading gains are taxed at 20%.

See alsoShort selling

A contract whose value depends on the price of something else, such as a share, the dollar or soybeans. It serves both to protect whoever holds the real asset and to bet on price moves without owning it.

See alsoOption (call and put)Futures contractHedge

What a company paid out over the last year divided by the share's current price. An 8% yield means that, if payments hold, you receive 8% of the amount invested each year in dividends alone.

See alsoDividendsPayout ratio

The share of profit a company distributes to shareholders, in cash. In Brazil they are free of income tax for the individual who receives them. Frequency varies: some companies pay quarterly, others once a year.

See alsoInterest on equity (JCP)Dividend yieldCum-dividend and ex-dividend dates

A fund traded on an exchange like a share that mirrors a basket of assets, usually an index. Buying one unit of an Ibovespa ETF is, in practice, buying a sliver of every share in the index.

See alsoIbovespaInvestment fund

A further share offering by a company already listed. It can raise money for the company or simply let a large shareholder sell down their stake.

See alsoIPOPrimary and secondary offering

The portion of a company's shares actually circulating on the exchange, outside the controlling shareholders' hands. The larger the free float, the easier it is to buy and sell without moving the price.

See alsoLiquidityNovo Mercado

A commitment to buy or sell something on a future date at a price set today. Companies use it constantly to lock in the price of the dollar or a raw material before they need it.

See alsoDerivativeHedge

A trade made to reduce a risk the company already carries, not to make money. An importer buying dollar futures is hedging: if the currency rises, the higher purchase cost is offset by the gain on the contract.

See alsoDerivativeFutures contract

The platform through which a person sends buy and sell orders to the exchange, via their broker's site or app. It is the bridge between the investor and the trading session.

See alsoBrokerageTrading session

The main index of the Brazilian stock exchange. It gathers the most traded shares and works as a thermometer: when people say the market went up, they usually mean this index.

See alsoStock indexETF

Another way a company pays shareholders. For the company it is a deductible expense, which lowers its tax bill; for the recipient, unlike a dividend, 15% income tax is withheld at source.

See alsoDividends

An initial public offering, the first time a company sells shares to the public and starts trading on an exchange. From then on it must report results regularly and follow governance rules.

See alsoFollow-on offeringPrimary and secondary offering

The share price multiplied by the total number of shares. It is what the market says the whole company is worth at that moment, which can differ a great deal from its book value.

See alsoP/E ratioValuation

The B3's most demanding governance tier. Companies listed on it may only issue common shares, must guarantee 100% tag along rights and keep a minimum of shares in circulation.

See alsoTag alongFree float

Buying shares in quantities smaller than the standard lot of 100. It is what lets you buy 7 shares instead of 100. On the B3, the ticker gains an F at the end.

See alsoTicker

A contract granting the right, not the obligation, to buy (a call) or sell (a put) an asset at an agreed price up to a given date. The buyer pays a premium for that right.

See alsoDerivativeStock options

What you pay for a share divided by the profit it generates per year. A P/E of 10 means that, at the current profit level, it would take ten years of earnings to pay back today's price.

See alsoMarket capitalisation

The slice of profit a company decides to distribute, as a percentage. A 40% payout means 40% of profit became dividends and the rest stayed in the company to invest or pay down debt.

See alsoDividendsDividend yield

A share that usually carries no vote but has priority in receiving dividends. On the B3 its ticker ends in 4. It trades influence for priority on the money.

See alsoCommon share (ON)Dividends

In a primary offering the shares are new and the money goes into the company's coffers. In a secondary one an existing shareholder sells their shares and the money goes to that shareholder, not the company.

See alsoIPOFollow-on offering

An arrangement where a shareholder lends shares to another investor in exchange for a fee. The borrower usually wants to sell the stock betting its price will fall.

See alsoShort selling

A slice of ownership in a company. Whoever holds a share is a part owner in proportion to what they bought, and gains in two ways: from the price rising and from the share of profit the company distributes.

See alsoCommon share (ON)Dividends

Selling a share you do not own by borrowing it, in order to buy it back cheaper later. If the price rises instead of falling, the loss has no defined ceiling.

See alsoSecurities lending

A split divides each share into several, lowering the unit price without changing the total value of your position. A reverse split does the opposite, merging several shares into one. Neither makes an investor richer or poorer.

See alsoShare

A basket of shares used as a performance benchmark for a group or a sector, such as a small cap or a dividend index. It exists for comparison: a fund that returned less than its index fell short of what it set out to do.

See alsoIbovespaBenchmark

The preference given to existing shareholders to buy shares in a new issue before the market does, usually at a lower price. It exists so current owners can avoid being diluted.

See alsoDilutionFollow-on offering

The right of a minority shareholder to sell alongside when control of the company is sold, at a price proportional to what the controlling shareholder received. It protects small holders from being stuck with a new owner.

See alsoNovo MercadoDrag along

The four-letter code plus a number that identifies a security on the exchange, such as PETR4. The letters stand for the company and the number for the share class.

See alsoCommon share (ON)Unit

The part of the day when the exchange is open for trading, today entirely electronic. Outside those hours, orders queue for the next session.

See alsoAuctionCircuit breaker

A bundle that trades as one security while holding different share classes of the same company, for example one common and two preferred shares. Its ticker ends in 11.

See alsoCommon share (ON)Preferred share (PN)

An investment with no agreed rule for the return: what you make depends on the price you manage to sell at, which moves every day. Shares, listed property funds and crypto are examples.

See alsoShareFixed income

The association of Brazilian banks, asset managers and brokerages, which writes self-regulation rules for the market, such as fund classification and marketing standards. It does not replace the CVM; it adds to it.

See alsoCVMSuitability

The reference a fund compares itself against, such as the CDI for fixed income or the Ibovespa for equities. It answers whether a result was good relative to what the fund set out to do, rather than in absolute terms.

See alsoStock indexCDI

A brick fund is a listed property fund that buys real buildings, such as malls and warehouses, and lives off the rent. A paper fund buys property-backed securities, such as CRIs, and lives off their interest.

See alsoFII (listed property fund)CRI and CRA

An advance income-tax charge applied twice a year, in May and November, to certain Brazilian funds. Instead of taking cash, the tax authority reduces the number of units the investor holds, which is where the name comes from. Equity funds are not subject to it.

See alsoFund unitRegressive income tax

The institution that holds the fund's assets and confirms they genuinely exist. It is one more layer of separation between whoever decides and whoever holds the money.

See alsoFund administratorCustody

Brazil's securities and exchange commission, which regulates and supervises the capital markets: the exchange, funds, asset managers and public offerings. The Central Bank looks after payments and banks; the CVM looks after investment.

See alsoAnbimaCentral Bank of Brazil (BCB)

A fixed income fund that tracks the CDI by investing in government bonds and low-risk paper. It is the most common choice for reserves, and the thing to watch is the management fee, which eats a good share of the return.

See alsoCDIManagement fee

A fund that keeps most of its assets in shares. Income tax is a flat 15% on the gain, charged only on redemption, and it is not subject to the come-cotas advance charge.

See alsoShareCome-cotas

A fund with a single unitholder, usually a family or a company with substantial assets. It allows a tailored strategy and succession planning, at the cost of fixed fees that only pay off above a certain size.

See alsoInvestment fund

A fund focused on agribusiness chains, able to invest in land, sector receivables or stakes in agricultural companies. It was created in 2021 and trades on the exchange.

See alsoFII (listed property fund)FIDC

A fund that invests in property or property-backed securities and trades on the exchange like a share. It passes rent to unitholders almost always monthly, currently free of income tax for individuals who meet the legal conditions.

See alsoBrick funds and paper fundsCap rateCRI and CRA

A Brazilian fund that buys stakes in companies not listed on an exchange and usually gets involved in running them. It is the structure private equity and venture capital use in Brazil.

See alsoPrivate equityVenture capital

Whoever is legally responsible for the fund: records, accounting, calculating the unit price and communicating with unitholders. It is deliberately separate from management, so that no one controls both the money and the decisions.

See alsoFund managerCustodian

Whoever decides where the fund's money goes, within the limits of its prospectus. The role requires registration with the securities regulator and answers for strategy and results.

See alsoFund administratorCVM

Everything the fund owns minus what it owes. Divided by the total number of units, it gives each unit's value. It also tells you the fund's size.

See alsoFund unit

The document setting out what a fund may and may not do: where it invests, its risk limits, what it charges and its redemption terms. In a dispute it is the prospectus that counts, not the marketing material.

See alsoKey information sheetInvestment fund

The smallest slice of a fund. A unit's value rises or falls with the fund's assets, and its price comes from dividing the fund's total assets by the number of units.

See alsoUnitholderFund net assets

The rule that stops a manager charging a performance fee twice on the same gain. After a fall, they can only charge again once the unit price passes its previous peak.

See alsoPerformance fee

A structure where several people pool money to be invested by a professional manager, under rules written into a prospectus. Each one owns a slice proportional to what they put in, called a unit.

See alsoFund unitFund managerFund prospectus

A standardised two-page summary with a fund's essentials: objective, risk, fees, past performance and target investor. It exists so funds can be compared without reading the whole prospectus.

See alsoFund prospectus

A percentage charged per year on the fund's entire assets, paying for management and administration. It is deducted from the unit price daily, so the return you see is already net of it.

See alsoPerformance fee

A fund that can invest across several asset classes at once: rates, currencies, equities, in Brazil and abroad. It is the category with the most freedom, which makes the manager the single most important variable.

See alsoEquity fundBenchmark

In an open-ended fund you can come and go by asking the fund itself to redeem. In a closed-ended one the number of units is fixed, and leaving early means selling your unit to another investor, often on an exchange.

See alsoRedemptionFII (listed property fund)

An extra charge on whatever the fund earned above its benchmark, usually 20% of the excess. It is only owed when the manager beats the agreed reference.

See alsoBenchmarkHigh-water mark

CVM classifications based on wealth. A qualified investor holds over R$ 1 million in investments; a professional one, over R$ 10 million. The higher the bracket, the more complex the products available, with less regulatory protection.

See alsoSuitabilityCVM

A request to leave a fund and get the money back. Between the request and the money landing there are two periods: converting the unit and paying out, written as D+1, D+30 and so on.

See alsoOpen-ended and closed-ended fundsD+0, D+1, D+30

The duty to check whether an investment matches a client's profile, goals and knowledge before offering it. It is the questionnaire that labels you conservative, moderate or aggressive.

See alsoQualified and professional investor

Whoever owns units in a fund. They do not choose where the money goes, but they have a right to information, to vote at meetings in certain cases and to redeem under the fund's rules.

See alsoFund unitUnitholders meeting

A meeting where unitholders vote on decisions that change the fund, such as replacing the manager, changing fees or winding it up. Voting weight is proportional to units held.

See alsoUnitholder

A situation foreseen in the contract that makes the whole debt fall due ahead of time, usually a broken covenant or defaults above a set level.

See alsoCovenantDefault rate

Whoever sells the right to be paid. In a receivables advance, it is the company that made the credit sale and transfers to someone else the right to collect it.

See alsoDraweeAssignment of credit

An obligation written into a contract that the borrower must keep while the debt exists, such as holding leverage below a limit. Breaking it can give the lender the right to demand everything at once.

See alsoAcceleration eventLeverage

A grade measuring the chance that an issuer or a deal fails to pay. Scales run from AAA, the lowest risk, down to D, which means default. It exists so different securities can be compared on one criterion.

See alsoRating agencyDebenture

The share of a portfolio overdue beyond an agreed cut-off, usually 90 days. It is the most watched indicator in any credit operation, expressed as a percentage of the total.

See alsoLoan loss provisionVintage

Whoever owes the amount and will pay on the due date. In a business-to-business credit sale, the drawee is the buying company. The drawee's credit quality is what sets the deal's risk.

See alsoAssignorReverse factoring (risco sacado)

The amount a company books as a likely loss before it actually happens, so the balance sheet reflects what will probably never be collected.

See alsoDefault rateProvision

An estimate of how much of a portfolio will go unpaid, month by month, from origination onwards. It is what sizes the subordination layer and prices the risk before a deal starts.

See alsoVintageSubordination

Whoever creates the credit at the front line, say the fintech granting the loan or the shop selling in instalments. It may or may not be the same company that assigns the receivables.

See alsoAssignorServicer

Putting more receivables into a deal than the value of the securities issued, say R$ 120 of credit for R$ 100 raised. The cushion exists to absorb expected defaults.

See alsoSubordinationLoss curve

The order in which incoming money is distributed: first expenses and fees, then interest and principal for each layer, from the most senior down to the most subordinated. Whatever is left goes to the last one.

See alsoSubordinationSenior, mezzanine and subordinated units

An independent company that analyses and assigns credit grades, such as Standard & Poor's, Moody's and Fitch. It is paid by the issuer, which is a recurring criticism of the model.

See alsoCredit rating

A clause where the assignor remains liable if the debtor does not pay. With recourse, the risk does not truly leave the seller's balance sheet; without it, it does.

See alsoAssignorAssignment of credit

A company that buys other companies' rights to future payments, such as instalments from credit sales, and turns them into securities sold to investors. It advances the cash to the seller and passes the risk on to whoever buys the security.

See alsoSecuritisationCRI and CRASegregated estateRead more about this

An arrangement where the assets backing an issue are ring-fenced from the rest of the securitisation company. If it fails, those receivables still answer only to the investors in that specific deal.

See alsoSecuritisation companySPV

The three typical layers of a Brazilian receivables fund. The senior layer is paid first and earns least, the subordinated one is paid last and absorbs losses before anyone else, and the mezzanine sits in between. The originator usually keeps the subordinated layer, to show it trusts its own portfolio.

See alsoSubordinationFIDC

Whoever handles the portfolio day to day after assignment: issuing charges, collecting payments, tracking arrears and running the collections process. Often it is the originator itself, hired to carry on doing it.

See alsoOriginatorDefault rate

A special purpose vehicle: a company created for one purpose only, say running a construction project or holding a credit portfolio. It exists to keep that risk apart from the rest of the group.

See alsoSegregated estateRing-fenced development

Splitting investors into priority layers. The subordinated layer absorbs losses first and is paid last, which shields the layers above it.

See alsoSenior, mezzanine and subordinated unitsPayment waterfall

An institution hired to represent investors and check whether the issuer is doing what it promised. If something breaches the contract, the trustee calls the meeting and takes the agreed steps.

See alsoCovenantUnitholders meeting

A group of loans granted in the same period, tracked over time. Comparing vintages shows whether lending quality is improving or deteriorating, which an overall default rate hides.

See alsoDefault rateLoss curve

A contract where a property is built to a specific tenant's requirements, and that tenant commits to a long lease. The long lease is what makes the construction viable.

See alsoSale and leaseback

A property's annual rent divided by its price. An 8% cap rate means one year of rent equals 8% of the amount paid. It allows properties to be compared the way investment yields are.

See alsoFII (listed property fund)Vacancy

The developer buys the land, conceives the project, sells the units and answers for delivery. The builder carries out the construction. They can be the same company, but the roles are distinct.

See alsoProperty development

The set of documents registered with the land registry before sales begin, describing the project, the units and the land's legal status. Without it on file, selling off-plan is not legal.

See alsoProperty developmentLand registry

A guarantee where the financed asset stays in the lender's name until the debt is settled. It is what allows a property or vehicle to be repossessed quickly on default, and that is why it makes credit cheaper.

See alsoMortgageMortgage loan

The sum of the asking price of every unit in a development. It is the sector's measure of size, but it is neither revenue nor profit, because it assumes everything sells.

See alsoProperty development

An annual municipal tax charged to the owner of an urban property, calculated on an assessed value. In a commercial lease, the contract usually passes it on to the tenant.

See alsoITBI (property transfer tax)

A municipal tax charged when a property changes hands. The rate varies by city and usually sits between 2% and 3% of the value. Without it paid, the registry will not record the transfer.

See alsoLand registryIPTU (municipal property tax)

The registry office responsible for recording ownership and encumbrances for every property in an area. In Brazil, ownership only truly transfers when the registration happens, not when the contract is signed.

See alsoProperty title recordPublic deed

A deal where a landowner hands over the plot to a developer and receives finished units, or a share of sales, instead of cash. It reduces how much cash the developer needs at the start.

See alsoProperty developmentGross sales value (VGV)

How much of a property's value is being financed. A 70% LTV means the bank lent 70% and the buyer put down 30%. The lower the LTV, the lower the lender's risk and usually the interest rate. Not to be confused with the LTV used in startups and sales, which is a customer's lifetime value.

See alsoMortgage loanLTV (lifetime value)

An older form of guarantee where the property stays in the borrower's name but is tied to the debt. Repossession requires going to court, which is why it is used less than the fiduciary lien.

See alsoFiduciary lien

A long-term loan to buy a property, with the property itself as the guarantee. Terms reach 35 years, and instalments split between principal, interest and compulsory insurance.

See alsoSFH and SFILTV (loan to value)Fiduciary lien

A document issued by the city hall confirming that construction finished as approved and that the property can be occupied. It is the milestone that releases the keys.

See alsoProperty development

The private area is the part for the occupant's exclusive use, inside the unit's walls. The common area is what everyone shares, such as the lobby and car park. Together they make the total area used in listings.

See alsoService charge

The business of planning and selling units in a building before or during construction. The developer commits to delivering the finished property and is legally answerable for it.

See alsoDeveloper and builderDevelopment filing

A property's birth certificate: a unique number at the land registry where everything that happens to it is recorded, from sales to mortgages and liens. It is the document that says who owns it.

See alsoLand registryPublic deed

A document drawn up at a notary where buyer and seller formalise a sale. It is the step before registration, and both are needed for the transfer to take effect.

See alsoLand registryITBI (property transfer tax)

An arrangement where a project's land and money are kept apart from the rest of the developer's business. If the company fails, that development has its own resources to be finished, which protects the buyers.

See alsoSegregated estateProperty development

A deal where a company sells a property it occupies and stays on as the tenant. It turns an idle asset into cash without interrupting operations, trading ownership for rent.

See alsoBuild to suitWorking capital

The monthly fee residents pay to cover a building's shared costs, such as cleaning, security and maintenance. It is neither a tax nor rent; it is a cost split.

See alsoPrivate and common areaIPTU (municipal property tax)

Two Brazilian mortgage regimes. The SFH uses savings and severance fund money, caps the property value and limits interest. The SFI has no such caps and serves higher-value properties at free-market rates.

See alsoMortgage loan

The share of a building's or a fund's area sitting empty and therefore producing no rent. It is the indicator that most affects a listed property fund's monthly payout.

See alsoFII (listed property fund)Cap rate

An offer to pay part of the remaining instalments upfront in order to be selected sooner. Whoever offers the highest percentage takes the credit letter at that meeting.

See alsoEmbedded, fixed and free bidsSelection

The money from every member's instalments, used solely to buy the group's credit letters. It is not mixed with the administrator's own cash.

See alsoReserve fundPool group

A group of people who join to buy the same kind of asset, each paying a monthly instalment. Every month the group's money buys one or more credit letters, drawn by lot or given to the best bid. There is no interest, but there is an administration fee.

See alsoCredit letterSelectionConsórcio administrator

What the administrator charges for the service, spread across the instalments over the whole plan. It is the real cost of a consórcio, since there is no interest, and it is the number to compare between administrators.

See alsoConsórcio administratorManagement fee

A company authorised by the Central Bank to form and run purchase pools. It charges the administration fee, organises the meetings and is answerable for delivering the credit letters.

See alsoConsórcio (purchase pool)Consórcio administration fee

The amount a member receives once selected, to buy the asset outright. It is adjusted through the plan to track the asset's price, and the outstanding balance follows the same adjustment.

See alsoSelectionOutstanding balance

Insurance that settles or covers the remaining instalments if the member dies or becomes disabled. It is common in consórcios and loans, and appears as one more line in the instalment.

See alsoConsórcio (purchase pool)Mortgage loan

A form of selection decided by chance, usually using the federal lottery numbers so the result can be audited. Every member up to date takes part in every meeting's draw.

See alsoSelectionPool meeting

Three varieties. In an embedded bid the amount comes out of the credit letter itself, reducing what is left to buy with. In a fixed bid the percentage is set in the contract and bidders go to a draw. In a free bid, everyone offers whatever they want.

See alsoBid

How much is still owed. In a consórcio it is expressed as a percentage of the credit letter rather than in reais, because the letter is adjusted through the plan.

See alsoCredit letter

The set of participants sharing the same plan, with a defined term and credit amount. Everything in a consórcio happens inside the group: the money raised only buys assets for its own members.

See alsoConsórcio (purchase pool)Pool meeting

The group's monthly meeting, where contributions are counted, draws are held and bids are judged. It is where that month's selections are decided.

See alsoDrawBid

A separate percentage charged to cover the group's contingencies, such as members defaulting. Whatever is left when the group closes is returned to the members.

See alsoCommon fund

The moment a member gains the right to use the credit letter. It happens by draw or by bid, and only then can the asset be bought. Whoever is selected keeps paying instalments to the end.

See alsoDrawBidCredit letter

Leaving the group before the end. The member does not get the money back straight away: they join a queue, usually paid only when the group closes, and with the deductions set out in the contract.

See alsoPool group

Programmes supporting companies at the start. An incubator helps get an idea off the ground, with space and mentoring. An accelerator works with companies that already have a product, usually investing a small amount for equity.

See alsoPre-seed and seed

An individual investing their own money in very young companies, usually smaller amounts accompanied by advice and contacts. It tends to be the first money from outside the family.

See alsoPre-seed and seedVenture capital

A small raise between two rounds, done to buy time until the next one. It usually comes from existing investors and signals that the larger round is not ready yet.

See alsoRunwayConvertible loan

How much cash a company burns per month, meaning how far the balance falls once money in and money out are netted. Runway is cash divided by burn rate.

See alsoRunwayCash flow

Customer acquisition cost: everything spent on marketing and sales divided by the number of customers won in the period. It answers what bringing in one more costs.

See alsoLTV (lifetime value)Unit economics

The spreadsheet showing who owns how much of a company: founders, investors and option holders. Every funding round changes those percentages, and the cap table is where each shareholder's dilution shows up.

See alsoDilutionOption pool

The share of customers, or of revenue, lost in a period. A 3% monthly churn means that, with no new sales, the base shrinks 3% a month. It is the indicator that decides whether growth sticks.

See alsoMRR and ARRLTV (lifetime value)

The opening stretch of a vesting schedule where nothing is earned. With a 12-month cliff, someone leaving in month eleven takes nothing; someone completing a year receives the first chunk all at once.

See alsoVesting

The two rules that set the price at which a SAFE or convertible turns into equity. The cap is a valuation ceiling; the discount is a reduction on the round's price. Both exist to reward whoever came in earlier.

See alsoSAFEConvertible loan

A loan that can turn into equity instead of being repaid in cash, usually at the next round. It is the Brazilian instrument most used for the same problem the SAFE solves.

See alsoSAFEConversion cap and discount

A large company's investment arm backing startups in its sector. Beyond money, it seeks access to technology and new markets, which makes the strategic interest as important as the financial return.

See alsoVenture capital

The drop in each shareholder's percentage when a company issues new shares. It does not mean losing money: the slice gets smaller, but of a bigger pie, if the round was done at a higher valuation.

See alsoCap tablePre-money and post-money valuationSubscription right

A round done at a lower valuation than the previous one. It dilutes existing shareholders more and usually triggers investor protection clauses, besides being a signal hard to hide from the market.

See alsoValuationLiquidation preference

The right of a group of shareholders to force the others to sell alongside them when a buyer appears for the whole company. It exists to stop a small holder blocking the sale.

See alsoTag alongExit

The audit an investor runs before signing: contracts, corporate records, finances, technology, labour and tax. Problems found here become a discount on the price or a condition for closing.

See alsoTerm sheet

Part of an acquisition price paid only if the acquired company hits targets after the sale. It exists to bridge the gap when buyer and seller disagree about the business's future.

See alsoM&A

The investor's way out, when equity turns into money. It happens through a sale to another company, a sale of the stake to a larger fund, or an IPO.

See alsoM&AIPOSecondary sale

A raise where a company issues new equity in exchange for money. Rounds are named by stage, and each one assumes the previous stage proved something.

See alsoPre-seed and seedSeries A, B and CTerm sheet

The investor who runs the round: negotiates the terms, signs first and usually puts in the largest share. The others come in on the same terms.

See alsoTerm sheetFunding round

A clause guaranteeing an investor gets their money back before the founders when the company is sold. In a low-value sale it can leave the founders with almost nothing.

See alsoExitDown round

How much margin a customer leaves over the whole time they stay with the company. Set against CAC, it says whether buying more customers is worth it. Not to be confused with the LTV in mortgage lending.

See alsoCACChurnLTV (loan to value)

Mergers and acquisitions: one company buying another, or the two combining. For a startup it is usually the most common form of exit.

See alsoExitEarn-out

Monthly and annual recurring revenue. It counts only what repeats under contract, such as subscriptions, and leaves out one-off sales. It is the measure of predictability in a subscription business.

See alsoChurnUnit economics

A slice of the company set aside to hand out to the team as stock options, usually between 5% and 15%. It is often created before a round, which puts the dilution on existing shareholders rather than the incoming investor.

See alsoStock optionsDilution

Pre-money is what the company is worth before the investment arrives. Post-money is that figure plus the money that came in. If a company is worth 8 million and receives 2, post-money is 10, and the investor holds 20%.

See alsoValuationDilution

The first rounds. Pre-seed funds building the product, often before any revenue. Seed funds the search for the first customers and the proof that someone pays for the product.

See alsoFunding roundAngel investor

Funds that buy significant stakes, often control, in mature companies, aiming to reorganise and later sell them. Unlike venture capital, they deal with companies that already make a profit.

See alsoVenture capitalFIP (private equity fund)

An investor's right to put more money into later rounds in order to keep the percentage they already hold. It is how they avoid being diluted by whoever comes next.

See alsoDilutionSubscription right

The point where a product meets a market that genuinely wants it, and growth stops depending on sales effort. Before that, scaling the team and the spend is usually waste.

See alsoStartupChurn

How many months a company can operate on the cash it holds, at the current rate of spending. It is the number that sets the urgency of raising money or cutting costs.

See alsoBurn rateCash and cash equivalents

A simple agreement for future equity: a contract where an investor puts money in now and receives equity in a future round, without having to set a valuation today. It is quick and cheap, which is why it is common at early stage.

See alsoConvertible loanConversion cap and discount

The sale of a shareholder's stake to another investor, with no new money entering the company. It is how founders and employees get liquidity before a full exit.

See alsoExitPrimary and secondary offering

The rounds that follow, each larger than the last. Series A funds growth for a model that already works; Series B, expansion; Series C and beyond, scale or new markets.

See alsoFunding roundVenture capital

A young company searching for a business model that can grow far faster than its costs. It is not simply any new company: the defining trait is the search for scale, usually built on technology.

See alsoVenture capitalProduct-market fit

The right to buy company shares in the future at a price set today. It is the usual way to give the team a stake without spending cash, and it only becomes a gain if the company is worth more later.

See alsoOption poolVestingOption (call and put)

A short document summarising an investment's main terms before the definitive contracts: amount, valuation, governance and protections. Almost all of it is non-binding, yet in practice it settles the deal.

See alsoDue diligenceFunding round

The profit and cost of a single unit of the business, whether a customer, an order or a transaction. If it does not add up, growing only multiplies the loss.

See alsoCACLTV (lifetime value)Gross margin

What a company is worth, in money, in a negotiation. For a startup it does not come from profit, which often does not exist; it comes from what an investor accepts to pay, looking at growth, market and team.

See alsoPre-money and post-money valuationMarket capitalisation

Funds that invest in young, high-risk companies, expecting a few of them to pay for the losses on all the rest. They invest in exchange for equity and usually a board seat.

See alsoPrivate equityFIP (private equity fund)

A rule that makes a founder's or employee's equity be earned gradually, over time with the company. It exists so that whoever leaves early does not walk away with a slice they did not help build.

See alsoCliffStock options

Accrual records revenue when the sale happens, even if the money arrives later. Cash basis records it when the money actually arrives. This is why a company can show a profit on the income statement and still have no money in the bank.

See alsoCash flow statementCash flow

Assets are everything a company owns that can produce benefit: cash, inventory, machinery, receivables. Liabilities are everything it owes: suppliers, loans, wages. The difference between them is equity.

See alsoBalance sheetEquity

A photograph of what a company owns and owes on a specific date. Unlike the income statement, which covers a period, the balance sheet shows the position at one moment.

See alsoAssets and liabilitiesEquity

The level of sales where revenue exactly covers all costs, with neither profit nor loss. Below it the company burns cash; above it, each extra sale starts contributing to profit.

See alsoGross marginFixed and variable costs

Shows the money that actually came in and went out, split into three sources: operations, investing and financing. It is the report that exposes a profit which never became cash.

See alsoCash flowAccrual and cash basis

Splitting a shared cost between the areas or products that use it, by some criterion such as headcount or floor area. It is what makes the true cost of each product knowable.

See alsoCost centre

A label identifying which area is responsible for an expense, such as marketing or logistics. It makes it possible to say how much each team spent, and it is the basis of any budget control.

See alsoCost allocationApproval rule

What it specifically cost to produce or buy whatever was sold, excluding overheads. For a retailer it is the purchase price of the items; for a manufacturer, the raw materials and production labour.

See alsoGross marginIncome statement

The way of recognising, little by little, that an asset loses value with use. Depreciation applies to physical things such as machinery; amortisation to intangibles such as software. Both reduce reported profit without taking cash out.

See alsoEBITDAEBIT

Days inventory outstanding: how many days a product sits before it is sold. Together with DSO and DPO it forms the cash conversion cycle.

See alsoCash conversion cycleDSO

Days payable outstanding: how many days a company takes to pay its suppliers. Stretching DPO funds the operation, but it squeezes the supplier and can cost early payment discounts.

See alsoDSOAccounts payableReverse factoring (risco sacado)

Days sales outstanding: how many days, on average, a company takes to be paid after a sale. The higher it is, the more money sits in customers' hands.

See alsoDPOCash conversion cycleAccounts receivable

Earnings before interest and taxes. It is EBITDA after depreciation and amortisation are deducted, so it already accounts for the wear on the assets the operation uses.

See alsoEBITDADepreciation and amortisation

Earnings before interest, taxes, depreciation and amortisation. It allows the operations of different companies to be compared without the effect of debt, tax regime and asset accounting. It is not cash, and treating it as cash is the most common mistake with it.

See alsoEBITNet profitLeverage

What is left for the shareholders after everything the company owes is deducted. It is the capital they put in plus the profits retained in the business over time.

See alsoAssets and liabilitiesBalance sheet

Fixed costs are paid whether or not anything is sold, such as rent and salaries. Variable costs only exist when there is a sale, such as raw materials and commission. The balance between them sets how risky the business is when revenue falls.

See alsoBreak-even pointGross margin

Gross revenue is everything sold. Net revenue is what remains after sales taxes, returns and discounts are taken out. Almost every serious indicator uses the net figure, because the gross one includes money that was never the company's.

See alsoIncome statementGross margin

Net revenue minus the cost of what was sold, as a percentage of revenue. It shows how much of each sale is left to pay for the company's structure. It is the first indicator to look at in a new business.

See alsoCost of goods soldNet marginUnit economics

The accounting standards defining how each item must be recorded. IFRS is the international standard; the CPCs are the Brazilian rules aligned with it. They exist so that two companies' statements can be compared.

See alsoIndependent auditBalance sheet

The report that shows, from top to bottom, how much a company sold, what it spent at each layer and how much profit was left in the period. It answers whether the company made money.

See alsoBalance sheetNet profit

An external firm's examination of the financial statements, issuing an opinion on whether they reflect reality. It is mandatory for listed companies and regulated institutions, and investors and lenders usually require it.

See alsoIFRS and CPC

How far a company relies on debt, usually measured as net debt divided by EBITDA. A ratio of 3 means it would take three years of operating generation to clear the debt. It is the number covenants usually cap.

See alsoNet debtCovenant

All of a company's debt minus the cash it holds. A company with R$ 100 million of debt and R$ 40 million in cash has net debt of R$ 60 million.

See alsoLeverageEBITDA

Net profit divided by net revenue. Of every R$ 100 sold, how much became actual profit after everything, including taxes and interest.

See alsoNet profitGross margin

What is left at the very end: after costs, expenses, interest and taxes. It is the bottom line of the income statement and the base for calculating dividends.

See alsoIncome statementDividendsNet margin

An amount set aside on the balance sheet for an expense that is likely but has not happened yet, such as a lawsuit or a debt that will probably go unpaid. It brings the loss forward so the result is not a surprise later.

See alsoLoan loss provision

Return on equity: profit divided by the shareholders' capital. It answers how much the company generates for its owners. A high ROE achieved with heavy debt is less solid than it looks.

See alsoROICLeverage

Return on investment: what a spend gave back, as a percentage of what was put in. Simple and generic, it allows initiatives to be compared, from a campaign to a new machine.

See alsoROEROIC

Return on invested capital, counting both shareholders' money and debt. It is the more honest measure of operating efficiency, because it does not improve simply by swapping equity for debt.

See alsoROELeverage

How much money the operation needs tied up to keep running, because of the gap between paying suppliers and being paid by customers. If you pay in 30 days and are paid in 60, you have to fund 30 days of operation.

See alsoWorking capitalCash conversion cycleDSO

A regime where tax falls on the profit actually recorded in the accounts. It is mandatory above R$ 78 million of annual revenue and for financial institutions, and it is the only regime where a loss reduces future tax.

See alsoPresumed profit regimeIRPJ and CSLL

The payment slip used to settle federal taxes in Brazil. It is what an investor must issue and pay themselves after selling shares at a gain above the exemption.

See alsoIncome tax on investments

Brazil's two electronic invoices: one for goods, one for services. The goods invoice is standardised nationally; the services one was municipal and is being unified into a national standard.

See alsoNota fiscal (tax invoice)ISS (municipal service tax)

A state tax on the movement of goods and some services. Each state sets its own rate and rules, and it is the tax at the centre of Brazil's interstate tax competition.

See alsoISS (municipal service tax)Tax substitution

Taxation varies by product, which is what confuses people. Fixed income follows the regressive table from 22.5% down to 15%; shares pay 15% on the gain, exempt for monthly sales up to R$ 20,000; dividends are currently exempt; LCI, LCA, CRI, CRA and infrastructure debentures are exempt for individuals.

See alsoRegressive income taxDividendsLCI and LCA

Brazil's tax on financial operations. It applies to credit, foreign exchange, insurance and some investments. It is the tax that shows up when you take a loan, use a card abroad or cash out an investment within 30 days.

See alsoRegressive IOF

The two taxes on company profit: corporate income tax and the social contribution on net profit. They move together, and the base depends on which tax regime the company is under.

See alsoActual profit regimePresumed profit regime

A tax on services charged by the municipality where the service is provided. The rate ranges from 2% to 5% depending on the city and the service, which has historically caused disputes between municipalities.

See alsoICMS (state goods tax)Nota fiscal (tax invoice)

The simplest regime of all, with a low annual revenue cap, a fixed monthly tax amount and limits on activity and number of employees.

See alsoSimples Nacional

The rule allowing tax already paid at earlier stages of the chain to be deducted from the tax due. It prevents the same value being taxed over and over before reaching the consumer.

See alsoTax creditPIS and Cofins

The electronic document that records a sale or a service with the tax authority. It creates the tax obligation and serves as the basis for accounting and for reconciling what was sold.

See alsoElectronic invoicingReconciliation

Federal contributions levied on a company's revenue. They can be cumulative, with a lower rate and no credit, or non-cumulative, with a higher rate and credit on inputs. They are being replaced by the CBS.

See alsoNon-cumulativityCBS and IBS

A regime where the tax authority presumes a standard profit margin on revenue and taxes that, regardless of actual profit. It pays off for companies whose margin is higher than the presumed one.

See alsoActual profit regimeSimples NacionalIRPJ and CSLL

The tax base is the amount the tax falls on; the rate is the percentage applied to that base. Most tax disputes are about the base, not the rate.

See alsoNon-cumulativity

A regime that bundles several taxes into a single payment, with a rate that rises with revenue. It is aimed at companies earning up to R$ 4.8 million a year and simplifies the routine a great deal, though it is not always the cheapest.

See alsoPresumed profit regimeMEI (individual microentrepreneur)

Brazil's public digital bookkeeping system: the set of files through which companies deliver their accounting and tax information to the government electronically, replacing paper ledgers.

See alsoNota fiscal (tax invoice)Independent audit

Tax already paid on a purchase that a company can offset against the tax it owes on a sale. Accumulating credits without being able to use them is a common cash problem for exporters.

See alsoNon-cumulativity

A regime where one link in the chain, usually the manufacturer, pays upfront the tax the later links would owe. It simplifies enforcement and brings revenue forward, but it takes cash from whoever pays early.

See alsoICMS (state goods tax)

When the payer deducts the tax before handing over the money and pays it straight to the government. It shows up in business-to-business services, in wages and in investment income.

See alsoIRPJ and CSLLISS (municipal service tax)