AAR – average annual return
ACH – automated clearing house—a collection of 32 regional electronic interbank networks used to process transactions electronically with a guaranteed one-day bank collection float
ADP – automatic data processing
ADR – alternative dispute resolution
AICPA – American Institute of Certified Public Accountants
ALM – asset liability management
AM – asset managementAP – accounts payable
APR – annual percentage rate – the periodic rate times the number of periods in a year; for example, a 5% quarterly return has an APR of 20%
APV – adjusted present value – the net present value analysis of an asset if financed solely by equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cash flows); the analysis is often used for highly leveraged transactions such as a leverage buy out.
APY – annual percentage yield – the effective, or true, annual rate of return; the APY is the rate actually earned or paid in one year, taking into account the affect of compounding; the APY is calculated by taking one plus the periodic rate and raising it to the number of periods in a year
AR – accounts receivable
ARMs – adjustable rate mortgage – a mortgage that features predetermined adjustments of the loan interest rate at regular intervals based on an established index
ARPS – adjustable rate preferred stock – publicly traded issues that may be collateralized by mortgages and MBSs
ARPS – auction rate preferred stock – floating rate preferred stock, the dividend on which is adjusted every seven weeks through a Dutch auction
ARR – average rate of return – the ratio of the average cash inflow to the amount invested
ASB – Accounting Standards Board
ATC – average total cost
ATOI – after tax operating income
AWL – actual wage lossB2B – Business to business
B2C – Business to consumer
BAN – bank anticipation notes – notes issued by states and municipalities to obtain interim financing for projects that will eventually be funded long term through the sale of a bond issue
BCR – benefit/cost ratio
BEP – break-even point
BLS – Bureau of Labor Statistics
CapEx – capital expenditures
CAPM – capital asset pricing model – an economic theory that describes the relationship between risk and expected return, and serves as a model for the pricing of risky securities; the CAPM asserts that the only risk that is priced by rational investors is systematic risk, because that risk cannot be eliminated by diversification
CAR – cumulative abnormal return – sum of the differences between the expected return on a stock and the actual return that comes from the release of news to the market
CASB – Cost Accounting Standards Board
CCI – consumer confidence index
CD – certificate of deposit – also called a time deposit, this is a certificate issued by a bank or thrift that indicates a specified sum of money has been depositedCEO – Chief Executive Officer
CEPS – cash earnings per share
CFAT – cash flow after taxes
CFC – controllers foreign corporation – a foreign corporation whose voting stock is more than 50% owned by US stockholders, each of whom owns at least 10% of the voting power
CFO – chief financial officer, the individual in an organization with overall responsibility for accounting, treasury, financial management, financial reporting, finance and related functions; reports direction to the CEO
CFR – Code of Federal Regulations
CGT – capital gains tax
CHRO – Chief Human Resource Officer
CIO – Chief Investment Officer/Chief Information Officer
CISO – Chief Information Security Officer
CMA – Certified Management AccountantCMO – Chief Marketing Officer
CO – Compliance Officer
COBRA – Consolidated Omnibus Budget Reconciliation Act
COO – Chief Operating/Operations Officer
CPA – certified public accountant, a credential conferred by a state or similar governmental jurisdiction that authorized the holder to practice as a certified public accountant in that jurisdiction
CPC – cost per click
CPG – consumer packaged goods
CPI – consumer price index
CRM – customer relationship management
CROGI – cash return on gross investment
CSO – Chief Security Officer
D & O – Directors and Officers
DCF – discounted cash flow – future cash flows multiplied by discount factors to obtain present values
DDM – discounted dividend model – a formula to estimate the intrinsic value of a firm by figuring the present value of all expected future dividends
DISC – Domestic International Sales Corporation – a US corporation that receives a tax incentive for export activities
DRP – disaster recovery plan
DRP – dividend reinvestment plan – automatic reinvestment of shareholder dividends in more shares of a company’s stock, often without commissions; dividend reinvestment plans allow shareholders to accumulate stock over the long term using dollar cost averaging; the DRP is usually administered by the company without charges to the holder
DSI – discretionary salary increase
DTC – depository transfer check – check made out directly by a local bank to a particular firm or person
EBIT – earnings before interest and taxes – a financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses; in other words, operating and non-operating profit before the deduction of interest and income taxes
EBO – employee buyout
EBR – enhanced business reporting – comprised of voluntary, globally recognized guidelines for providing richer disclosure of business information, allowing companies to better communicate current and expected performance while giving the investment community and other stakeholders the information they need to make better decisions; this includes financial statements, key performance indicators based on industry-specific definitions and company-specific information about strategy, plans, opportunities, and risks
EBT – earnings before tax
ECI – employment cost index
EDI – electronic data interchange – the exchange of information electronically, directly from one firm’s computer to another firm’s computer, in a structured format
EEO – equal employment opportunity
EFT – electronic funds transfer
EIC – earned income tax credit
EIN – employer identification number
EM – effective margin – the amount equaling the net earned spread, or margin, of income on the assets in excess of financing costs for a given interest rate and prepayment rate scenario
EOQ – economic order quantity – the order quantity that minimizes total inventory costs
EPOS – electronic point of sale
EPS – earnings per share – a company’s profit divided by its number of outstanding shares; if a company earned $2 million in one year had 2 million shares of stock outstanding, its EPS would be $1 per share
ERP – enterprise resource planning – a business management system that integrates all facets of the business to the related financial reporting functionality; help managers in business activities such as planning, manufacturing, sales, marketing, inventory control, order tracking and finance; ERP attempts to integrate all departments and functions across a company to create a single software program that runs off of one database
ESO – employee stock option
ESOP – employee stock ownership plan – a company contributes to a trust fund that buys stock on behalf of employees
EV – enterprise value
FASB – Financial Accounting Standards Board, independent, private, non-government group which is authorized by the accounting profession to establish generally accepted accounting principles (GAAP) in the United States
FCIA – Foreign Credit Insurance Association – a private US consortium of insurance companies that offers trade credit insurance to U.S. exporters in conjunction with the U.S. Export-Import Bank.
FDI – foreign direct investment – the acquisition abroad of physical assets such as plant and equipment, with operating control residing in the parent corporation
FDIC – Federal Deposit Insurance Corporation – a federal institution that insures bank deposits
FFO – funds from operations – used by real estate and other investment trusts to define the cash flow from trust operations; it is earnings with depreciation and amortization added back
FFY – federal fiscal year
FIFO – first in first out – a method of valuing the cost of goods sold that uses the cost of the oldest item in inventory first
FMV – fair market value
FOIA – Freedom of Information Act
FRA – forward rate agreement – agreement to borrow or lend at a specified future date at an interest rate that is fixed today
FSC – Foreign Sales Corporation – a special type of corporation created by the Tax Reform Act of 1984 that is designed to provide a tax incentive for exporting US-produced goods
FTC – Federal Trade Commission
FTP – file transfer protocol
GAAP – Generally Accepted Accounting Principles – a technical accounting term that encompasses the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time
GAAS – Generally Accepted Auditing Standards – standards governing the conduct of external audits by CPAs as determined by the Auditing Standards Board (ASB) of the AICPA
GDP – gross domestic product – the market value of goods and services produced over time including the income of foreign corporations and foreign residents working in the US, but excluding the income of US residents and corporations overseas
GIF – graphics interchange format
GNP – gross national product – measures economy’s total income; it is equal to GDP plus the income abroad accruing to domestic residents minus income generated in domestic market accruing to non-residentsGR – general revenue
HCM – human capital management
HTML – hypertext mark-up language
HTTP – hypertext transfer protocol
IASB – International Accounting Standards Board, an organization whose members represent 153 accounting bodies in 112 countries; this group is dedicated to bringing about the harmonization of international accounting standards
IMF – International Monetary Fund – an organization founded in 1944 to oversee exchange arrangements of member countries and to lend foreign currency reserves to members with short-term balance of payment problems
IPO – initial public offering – a company’s first sale of stock to the public; securities offered in an IPO are often, but not always, those of young, small companies seeking outside equity capital and a public market for their stock; investors purchasing stock in IPOs generally must be prepared to accept very large risks for the possibility of large gains; IPOs by investment companies (closed-end funds) usually contain underwriting fees which represent a load to buyers
IRB – industrial revenue bond – bond issued by local government agencies on behalf of corporations
IRC – internal revenue code
IRR – internal rate of return
ISP – internet service provider
JOA – joint operating agreement
JPEG – joint photographic experts group
KPI – key performance indicators
LBO – leveraged buyout – a transaction used for taking a public corporation private financed through the use of debt funds: bank loans and bonds; because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment grade, properly referred to as high-yield bonds or junk bonds; investors can participate in an LBO through either the purchase of the debt (i.e. purchase of the bonds or participation in the bank loan) or the purchase of equity through an LBO fund that specializes in such investments
LEI – leading economic indicators
LIFO – last in first out – a method of valuing inventory that uses the cost of the most recent item in inventory first
LLC – limited liability company
LLP – limited liability partnership
LOC – letter of credit – a form of guarantee of payment issued by a bank used to guarantee the payment of interest and repayment of principal on bond issues
MBO – management buyout – leveraged buyout whereby the acquiring group is led by the firm’s management
MNC – multinational corporation
MPEG – motion picture exports group
MTL – multi-level marketing
MTM – market to market
NAV – net asset value – the value of a fund’s investments; for a mutual fund, the net asset value per share usually represents the fund’s market price, subject to a possible sales or redemption charge
NAVPS – net asset value per share
NOI – net operating income
NOL – net operating loss
NPV – net present value – the present value of expected future cash flows minus the cost
OA – operating assets
OCF – operating cash flow
OCR – optical text recognition
OE – operating expenseOI – operating income
OL – operating liabilitiesOR – operating revenue
P & L – profit and loss
P/E — Price/Earnings ratio – shows the “multiple” of earnings at which a stock sells; determined by dividing current stock price by current earnings per share (adjusted for stock splits); earnings per share for the P/E ratio is determined by dividing earnings for past 12 months by the number of common shares outstanding
PBT – profit before tax
PDF – portable document format
PEG – price to earnings growth
PERC – preferred equity redemption stock – preferred stock that converts automatically into equity at a stated date; a limit is placed on the value of the shares the investor receives
PLC – product life cycle
POA – power of attorney
PoP – point of purchase
PR – public relations
QC – quality control
R & D – research and development
RE – residual earnings
REIT – real estate investment trust – is similar to a closed end mutual fund; REITs invest in real estate or loans secured by real estate and issue shares in such investments
REMIC – real estate mortgage investment conduit – a pass-through tax entity that can hold mortgages secured by any type of real property and issue multiple classes of ownership interests to investors in the form of pass-through certificates, bonds or other legal forms; a financing vehicle created under the Tax Reform Act of 1986RFP – request for proposal
RFQ – request for quote
ROA – return on assets – indicator of profitability – determined by dividing net income for the past 12 months by the total average assets; result is shown as percentage; ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets)
ROC – return on capital
ROE – return on equity – indicator of profitability – determined by dividing net income for the past 12 months by common stockholder equity (adjusted for stock splits); result is shown as a percentage; investors use ROE as a measure of how a company is using its money; ROE may be decomposed into return on assets (ROA) multiplied by financial leverage (total assets/total equity)
ROI – return on investment – generally book income as a proportion of net book value
ROR – return on revenue
ROS—return on sales
RPPP – relative purchasing power parity – idea that the rate of change in the price level of commodities in one country relative to the price level in another determines the rate of change of the exchange rate between the two countries’ currencies
RR – retention rate
SBIC – small business investment company
SEC – Securities and Exchange Commission, agency of the federal government that regulates the public trading of securities; the SEC has the authority to establish accounting and auditing regulations but defers to the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board
SIC – abbreviation for Standard Industrial Classification; each 4-digit code represents a unique business activity
SOL – statute of limitations
TABs – tax anticipation bills – special bills that the treasury occasionally issues that mature on corporate quarterly income tax dates and can be used at face value by corporations to pay their tax liabilities
TANs – tax anticipation notes – notes issued by states or municipalities to finance current operations in anticipation of future tax receipts
UPC – universal product code
VPN – virtual private network
VWAP – value weighted average price
WACC – weighted average cost of capital – expected return on a portfolio of all of the firm’s securities; used as a hurdle rate for capital investment
WAL – weighted average life or (average life) – the average number of years that each dollar of unpaid principal due on the mortgage remains outstanding; average life is computed as the weighted average time to the receipt of all future cash flows, using as the weights the dollar amounts of the principal paydowns
WC – workers’ compensation
https://www.aicpa.org/Press/DownloadableDocuments/Acronyms_and_Abbreviations.pdf
https://www.nytimes.com/library/financial/glossary/bfglosa.htm
https://www.abbreviations.com/bmc.asp?c=BUSINESS
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