Acronyms and definitions
Commonly used acronyms and definitions
📊 Management Accounting Acronyms
| Acronym | Definition |
| ABC | Activity-Based Costing — allocates overheads based on activities driving costs |
| COGS | Cost of Goods Sold — direct costs attributable to production of goods sold |
| CVP | Cost-Volume-Profit — analysis of how changes in costs and volume affect profit |
| ROI | Return on Investment — measures profitability relative to investment cost |
| KPI | Key Performance Indicator — metrics used to evaluate performance |
| OPEX | Operating Expenses — day-to-day expenses not directly tied to production |
| CAPEX | Capital Expenditure — funds used to acquire or upgrade physical assets |
| NPV | Net Present Value — value of future cash flows discounted to present value |
| IRR | Internal Rate of Return — discount rate that makes NPV of cash flows zero |
| BEP | Break-Even Point — level of sales at which total revenue equals total costs |
| PPV | Purchase Price Variance — difference between standard and actual purchase price |
| TQM | Total Quality Management — continuous improvement approach to operations |
📘 Financial Reporting Acronyms (UK Standards)
| Acronym | Definition |
| FRS | Financial Reporting Standard — UK GAAP standards issued by FRC |
| FRC | Financial Reporting Council — UK regulator for accounting and auditing |
| UK GAAP | UK Generally Accepted Accounting Practice — framework for financial reporting |
| IFRS | International Financial Reporting Standards — global standards adopted by listed UK companies |
| IAS | International Accounting Standards — predecessor to IFRS, still in use |
| FS | Financial Statements — includes balance sheet, income statement, cash flow, etc. |
| GL | General Ledger — central repository of accounting data |
| AR | Accounts Receivable — money owed to the company by customers |
| AP | Accounts Payable — money the company owes to suppliers |
| BS | Balance Sheet — snapshot of assets, liabilities, and equity |
| IS | Income Statement — also known as P&L, shows revenue and expenses |
| P&L | Profit and Loss Statement — measures profitability over a period |
| HMRC | His Majesty’s Revenue and Customs — UK tax authority |
| CT | Corporation Tax — tax on company profits in the UK |
| VAT | Value Added Tax — indirect tax on goods and services |
| EPS | Earnings Per Share — net profit divided by number of shares |
| EBITDA | Earnings Before Interest, Taxes, Depreciation, and Amortisation — proxy for operating performance |
📐 Financial Ratios Acronyms (UK Context)
| Acronym | Definition |
| ROE | Return on Equity — net income divided by shareholder equity |
| ROA | Return on Assets — net income divided by total assets |
| GPM | Gross Profit Margin — gross profit as a % of revenue |
| OPM | Operating Profit Margin — EBIT as a % of revenue |
| NPM | Net Profit Margin — net income as a % of revenue |
| CR | Current Ratio — current assets divided by current liabilities |
| QR | Quick Ratio — (cash + receivables) divided by current liabilities |
| D/E | Debt-to-Equity Ratio — total liabilities divided by shareholder equity |
| ICR | Interest Coverage Ratio — EBIT divided by interest expense |
| WC | Working Capital — current assets minus current liabilities |
| DSO | Days Sales Outstanding — average time to collect receivables |
| DPO | Days Payables Outstanding — average time to pay suppliers |
| CCC | Cash Conversion Cycle — DSO + inventory days − DPO |
| EPS | Earnings Per Share — net income divided by number of shares |
| P/E | Price-to-Earnings Ratio — share price divided by EPS |
📈 Key Performance Indicator Acronyms
| Acronym | Definition |
| ARR | Annual Recurring Revenue — predictable revenue from subscriptions |
| MRR | Monthly Recurring Revenue — monthly version of ARR |
| CAC | Customer Acquisition Cost — cost to acquire a new customer |
| LTV | Lifetime Value — projected revenue from a customer over time |
| Churn | Customer attrition rate — % of customers lost over a period |
| ARPU | Average Revenue Per User — total revenue divided by number of users |
| NPS | Net Promoter Score — customer loyalty metric |
| CSAT | Customer Satisfaction Score — feedback-based performance metric |
| CTR | Click-Through Rate — % of users who click on a link or ad |
| CR | Conversion Rate — % of users who complete a desired action |
| FCR | First Contact Resolution — % of issues resolved on first contact |
| OTIF | On-Time In-Full — delivery performance metric |
| EBITDA Margin | EBITDA as a % of revenue — operating efficiency indicator |