Deferred revenue is money a business has received from customers for goods or services it has not yet delivered. Because the company still owes the customer that delivery, the money is recorded as a liability on the balance sheet, then moved into revenue gradually as the work is done or the product is provided.

Cost of goods sold, or COGS, is the direct cost of producing or buying the products a business sold in a period. It includes materials, the stock bought for resale and often the labour that makes the product. It is subtracted from revenue to calculate gross profit on the income statement.

Margin of safety is the gap between where you are and the point where you start losing money. In business, it often means how far sales can fall before a company stops breaking even. In investing, it means buying something for clearly less than you think it is worth, so mistakes hurt less.