---
title: "Acronyms and definitions"
url: "https://help.sherloc.elementaryb.com/en/article/acronyms-and-definitions"
language: "en"
last_updated: "2026-10-05T21:51:47.763Z"
---

# 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 Payable Outstanding: average time to pay suppliers |
| DIO | Days Inventory Outstanding: average time to sell the stock you hold |
| CCC | Cash Conversion Cycle: DIO + DSO − DPO |
| P/E | Price-to-Earnings Ratio: share price divided by EPS |
| CAB | Cash At Bank: the money your business holds across its bank accounts |
| CaR | Cash Ratio: cash and cash equivalents divided by current liabilities |
| CRW | Cash Runway: the number of months your business can keep operating at its current spending rate (Cash At Bank ÷ Net Burn Rate) |
| FOWC | Forecasting Operating Working Capital: Cash At Bank + incomings − outgoings |
| GBR | Gross Burn Rate: the total amount your business spends each month |
| NBR | Net Burn Rate: how much cash your business loses each month after the revenue coming in |
| GP | Gross Profit: revenue minus cost of sales |
| NP | Net Profit: profit after all expenses, interest and tax |
| OP | Operating Profit: profit from core operations, before interest and tax |
| REV | Revenue: total income from sales, before any costs are taken out |

## 📈 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 |
| CVR | 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 |