All the Business Acronyms You Need to Know

Open the New York Times or browse around the Internet for 30 minutes and I am sure that you will come across several business acronyms. Not knowing what they mean can be quite annoying. That is the purpose of the list below; to provide a quick reference to the most common used acronyms so you won’t get lost when they cross your path in the future. There is a brief explanation for each one as well.

API – Application Programming Interface (an interface created on database or computer system to accept requests from other computers and third parties)
ASP – Application Service Provider (a company that offers services to its customers via a network)
B2B – Business to Business (companies that sell to other companies, like Oracle)
B2C – Business to Consumer (companies that sell to individuals, like GAP)
CAD – Computer Aided Design (tools and software used by engineers and architects to design)
CAGR – Compound Annual Growth Rate (a cumulative interest rate used by banks or within investment projects)
CEO – Chief Executive Officer (the big boss)
CFO – Chief Financial Officer (head of the finance)
CMO – Chief Marketing Officer (head of marketing)
COO – Chief Operating Officer (head of operations)
CTO – Chief Technology Officer (responsible for the tech side)
CRM – Customer Relationship Management (a system to capture, analyze and store customer information in order to manage clients efficiently)
EBITDA – Earning Before Interests, Taxes, Depreciation and Amortization (an indicator of a company’s financial performance)
EDI – Electronic Data Interchange (a set of standards used to exchange data between different companies and organizations)
EPS – Earnings Per Share (is the ration between the profits of a company and the common shares)
ERP – Enterprise Resources Planning (a system that integrates all the data from an organization into a single location)
FIFO – First In, First Out (used both in computer programs and accounting; it determines that what comes first is handled first)
GAAP – Generally Accepted Accounting Principles (a framework used to carry out financial accounting within companies)
ICT – Information and Communications Technology (term used to encompass the fields related to IT and electronic communications)
ISV – Independent Software Vendor (a group of developers or company specialized in the production of software for a certain niche)
IPO – Initial Public Offering (when a company first introduces its shares on the stock market)
LIFO – Last In, First Out (used both in computer programs and accounting; it determines that what comes last is handled first)
LLC – Limited Liability Company (a legal entity where the owners are not liable personally)
MSRP – Manufacturer’s Suggested Retail Price (a recommendation made by a company in order to standardize the price of its products across different places)
NDA – Non-Disclosure Agreement (a contract between two parties to secure the confidentiality of information)
NPV – Net Present Value (a method to valuate long term investments or projects)
OEM – Original Equipment Manufacturer (a company that manufacturers equipment that will be re-branded and sold by other companies; sometimes it refers to the reseller as well)
OTC – Over-The-Counter (trade of stocks or other derivatives directly between two persons)
P&L – Profit and Loss (also called Income Statement, is an accounting report used to outline how revenues are transformed into profits)
POS – Point of Sale (a checkout point in retail stores, or the hardware behind it)
RFP – Request For Proposal (an invitation for suppliers to bid on a specif task or service)
ROI – Return On Investment (ratio of money earned relative to total money invested)
ROS – Return On Sales (ratio of money earned relative to total sales)
SAAS – Software As A Service (software or applications that are developed on the web and the users access it via the Internet)
SOHO – Small Office/Home Office (refers to small or home office environments)
TCO – Total Cost of Ownership (a method to estimate all the costs – direct and indirect – related to a project or purchase)
TQM – Total Quality Management (a management strategy to raise the awareness of the whole organization towards quality)
TSR – Total Shareholder Return (a method of valuation which takes into consideration both dividends and share price gains)
VC – Venture Capital (a form of financing where the owners give up part of the ownership)

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