Hispanic finance and labor glossary

Additional yearly salary paid in December in Ecuador. 1/12 of earnings Dec-Nov.

School bonus equal to one minimum wage (SBU), paid March (Coast) or August (Sierra) in Ecuador.

Personal budget method by Elizabeth Warren: 50% needs, 30% wants, 20% savings/debt.

Annual Recurring Revenue. ARR = MRR × 12. Investor preferred metric.

Ecuador SRI Simplified Transaction Annex. Monthly XML summary of purchases, sales and withholdings.

Body Mass Index: weight (kg) / height (m)². WHO normal 18.5–24.9.

Sales volume where total revenue equals total cost. Zero profit.

Capital efficiency = net burn / new ARR. <1 excellent, 1-2 normal, >2 problematic.

Rate at which a company spends capital, usually measured monthly. Gross burn = total spend; net burn = spend minus collected revenue.

Average cost to acquire a new customer. Total marketing+sales / new customers.

Days from paying supplier to collecting from customer. Shorter = better cash flow.

Percentage of customers (or MRR) lost in a period. Customer churn ≠ MRR churn.

Interest calculated on principal plus previously earned interest, not only principal.

Click-Through Rate. Clicks / impressions × 100. Creative attractiveness.

Invoice, credit note or withholding digitally signed and validated by tax authority before delivery.

Payment schedule with constant installment. Early payments are mostly interest, later mostly principal.

Worth of an amount or contributions in the future at a return rate.

Percentage + fixed fee a payment gateway charges per transaction. PayPal LATAM typical: 5.4% + USD 0.30.

Constant principal payment; interest decreases so total installment also decreases.

Revenue minus COGS divided by revenue. Per-sale operational efficiency.

Ecuadorian Social Security Institute. 2026 rates: employee 9.45%, employer 11.15%.

Ecuador Foreign Currency Outflow Tax. 5% on transfers abroad with exceptions.

Total revenue an average customer brings over their lifetime. Healthy: LTV ≥ 3× CAC.

Quarterly ARR growth / prior quarter S&M cost. >1 healthy commercial efficiency.

Profit over cost: (price − cost) / cost. Different from margin (over price).

Normalized monthly recurring revenue for a subscription business. Excludes one-time revenue.

Profit after all costs (direct + indirect + tax) divided by revenue.

% MRR retained from existing customers including expansion, minus churn. >110% world-class.

Today's investment needed to reach a specific future amount given a discount rate.

Ecuador 8.33% of salary paid to worker or accrued at IESS from month 13 of employment.

Ecuador Simplified Tax Regime for Entrepreneurs and Popular Businesses. Replaced RISE in 2022.

Return on Ad Spend = revenue / ad spend. Not profitability.

(Gain − cost) / cost × 100. Any investment, not only ads.

Months a startup survives at current net burn. Runway = cash / net burn.

Ecuador's unified minimum wage. 2026 ≈ USD 470. Basis for 14th salary and legal minimums.

Pre-revenue valuation method comparing the startup against a regional benchmark via weighted factors.

Input VAT deducted from output VAT for monthly filing.

Termination by employer without just cause. Generates indemnity (Ecuador Labor Code art. 188).

URL parameters that attribute traffic to a specific campaign in analytics.

Value Added Tax. Added to goods/services price. Ecuador 15%, Mexico 16%, Colombia 19%, Peru IGV 18%.

Buyer retains a tax % and remits it to authority directly. Ecuador applies for income tax and VAT per concept.

Current assets minus current liabilities. Day-to-day operational capacity.