LOST IN THE LETTERS?
Business speak, abbreviated.
Every short form you keep hearing, in plain words — with a worked example and a calculator to try it yourself.
All 14 abbreviations
MRR — Monthly recurring revenueThe predictable subscription income a business earns each month.ARR — Annual recurring revenueMonthly recurring revenue scaled up to a year.DEP — DepreciationThe drop in an asset’s value as it ages or wears out.CEO — Chief executive officerThe person who leads a company’s overall direction.IPO — Initial public offeringWhen a private company first sells shares to the public.NAV — Net asset valueWhat is owned minus what is owed.P/E — Price-to-earnings ratioHow many years of profit the share price represents.EBITDA — Earnings before interest, taxes, depreciation and amortisationOperating profit before financing, tax and non-cash costs.SDE — Seller’s discretionary earningsThe full benefit one owner-operator takes from a small business.ROI — Return on investmentHow much you gained compared with what you put in.CAC — Customer acquisition costWhat it costs, on average, to win one new customer.APR — Annual percentage rateA loan’s yearly cost with the fees folded in.% — PercentPer hundred.UTC — Coordinated Universal TimeThe world’s shared reference clock.