PLAIN-ENGLISH GUIDE
Rental-business terms without the finance class.
If a word on EquipMetric sounds like accountant language, start here. The goal is to make the decision understandable even if this is your first rental asset.
Common terms
Asking priceWhat the seller is asking you to pay. It is not necessarily what the equipment is worth or what it will sell for.
Comparable / compA similar piece of equipment used as a reference point for price or rental rate. The closer the year, size, condition, options and location, the more useful the comparison.
Break-even paid daysHow many paid rental days the equipment needs in an average month before the modeled bills and loan payment are covered.
Cash flowThe money left after the modeled operating costs and loan payment are paid. Positive cash flow means money is left over; negative cash flow means the model is short.
Debt-payment cushion (DSCR)A way to ask whether the equipment has enough operating cash to comfortably cover its loan payment. 1.25x means about $1.25 of operating cash for every $1.00 of loan payment.
Maximum price supported by your numbersThe highest purchase price the current assumptions can support while still meeting the cash-flow and loan-payment-cushion targets you entered. It is not an appraisal.
Price headroomHow far the seller’s asking price sits below or above the maximum price supported by your numbers.
Utilization / paid daysHow often the equipment is actually rented. EquipMetric usually shows paid days when possible because “6 paid days per month” is easier to understand than a percentage.
Market pressureA signal of how tight public rental availability appears. Higher pressure can mean equipment is harder to find available, but it is not a competitor’s private utilization record.
Evidence confidenceHow much trust EquipMetric puts in the available evidence. HIGH means the evidence is broader, more direct or repeated; LOW means you should verify more before making a decision.
Ready-to-rent costThe purchase price plus the things you may need before the asset can safely earn rental income, such as securement, spare tire, tracker or other category-specific setup.
Cash-on-cash returnAnnual modeled cash flow compared with the cash you personally put into the deal. It does not include every possible tax effect or future change in equipment value.
Resale / exit valueWhat the equipment might sell for later under the assumption entered in the model. It is an estimate, not a guaranteed future sale price.
BUY · NEGOTIATE · PASSEquipMetric model signals. BUY means the current numbers and evidence clear the model’s rules; NEGOTIATE means the opportunity may work at a better price or with stronger assumptions; PASS means the current setup does not clear the model. None is an instruction to transact.
READY TO TRY IT?
Run a Quick AnalysisStart with the deal in front of you.
Enter the price, loan terms and rental assumptions. EquipMetric will show the result and explain the important numbers as you go.