Business Abbreviations — Part 1 MCQs with Explanations

The term business-to-consumer (B2C) refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.

The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in India under the jurisdiction of Ministry of Finance, Government of India. It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.

The prime rate (prime) is the interest rate that commercial banks charge their most creditworthy customers, generally large corporations. The prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate that banks use to lend to one another. Prime forms the basis of or starting point for most other interest rates-including rates for mortgages, small business loans, or personal loans-even though prime might not be specifically cited as a component of the rate ultimately charged.

The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization or cartel of 13 countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has since 1965 been headquartered in Vienna, Austria, although Austria is not an OPEC member state. As of September 2018, the 13 member countries accounted for an estimated 44 percent of global oil production and 81.5 percent of the world's "proven" oil reserves, giving OPEC a major influence on global oil prices that were previously determined by the so-called "Seven Sisters" grouping of multinational oil companies.

The National Association of Software and Service Companies (NASSCOM) is an Indian non-governmental trade association and advocacy group focused mainly on Information Technology and Business Process Outsourcing industry. Established in 1988, NASSCOM is a non-profit organisation.

The London Inter-bank Offered Rate (LIBOR) is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.

The Confederation of Indian Industry (CII) is a non-governmental trade association and advocacy group headquartered in New Delhi, India, founded in 1895. CII engages business, political, academic, and other leaders of society to shape global, regional, and industry agendas. It is a membership-based organisation.

The Average Cost is the per unit cost of production obtained by dividing the total cost (TC) by the total output (Q). By per unit cost of production, we mean that all the fixed and variable cost is taken into the consideration for calculating the average cost. Thus, it is also called as Per Unit Total Cost.

The average annual growth rate (AAGR) reports the mean increase in the value of an individual investment, portfolio, asset, or cash flow on an annualized basis. It doesn't take compounding into account.

The Association of Mutual Funds in India is an industry standards organisation in India in the mutual funds sector. It was formed in 1995. Most mutual funds firms in India are its members. The organisation aims to develop the mutual funds market in India, by improving ethical and professional standards.

Tata Communications Limited is an Indian telecommunications company previously known as Videsh Sanchar Nigam Limited. It was previously under the ownership of Department of Telecommunications, under the Ministry of Communications of the Government of India. It was sold by Government of India to Tata Group. Presently the company is part of the Tata Group.

Small and medium enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank, the European Union, the United Nations and the World Trade Organization (WTO).

SENSEX stands for Stock Exchange Sensitive Index. It is the oldest stock exchange in India which is also known as BSE-30. It is a free floating stock market index which uses free floating market capitalization method to reflect the position of companies in the stock market. It does not consider the outstanding stock of a company. Its calculation is based on the total number of tradable shares of a company at the time of calculation.

Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. For instance, an investment with a profit of $100 and a cost of $100 would have a ROI of 1, or 100% when expressed as a percentage.

Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. This means that the exchange rate between two countries should equal the ratio of the two countries' price level of a fixed basket of goods and services. When a country's domestic price level is increasing (i.e., a country experiences inflation), that country's exchange rate must depreciated in order to return to PPP.

Oil and Natural Gas Corporation (ONGC) is an Indian government-owned crude oil and natural gas corporation. Its registered office is in New Delhi. It is under the ownership of Ministry of Petroleum and Natural Gas, Government of India. It is the largest oil and gas exploration and production company in the country, and produces around 70% of India's crude oil (equivalent to around 57% of the country's total demand) and around 84% of its natural gas. In November 2010, the Government of India conferred the Maharatna status to ONGC.

Net asset value, or "NAV," of an investment company is the company's total assets minus its total liabilities. For example, if an investment company has securities and other assets worth $100 million and has liabilities of $10 million, the investment company's NAV will be $90 million.

National Stock Exchange of India Limited is the leading stock exchange of India, located in the Mumbai city of Maharashtra state. It is under the ownership of some leading financial institutions, Banks, and Insurance companies. NSE was established in 1992 as the first dematerialized electronic exchange in the country.

Marginal revenue (MR) is the increase in revenue that results from the sale of one additional unit of output. While marginal revenue can remain constant over a certain level of output, it follows from the law of diminishing returns and will eventually slow down as the output level increases.

Marginal cost is the additional cost incurred in the production of one more unit of a good or service. It is derived from the variable cost of production, given that fixed costs do not change as output changes, hence no additional fixed cost is incurred in producing another unit of a good or service once production has already started.

Last in, first out (LIFO) is a method used to account for inventory. Under LIFO, the costs of the most recent products purchased (or produced) are the first to be expensed. LIFO is used only in the United States and governed by the generally accepted accounting principles (GAAP).

"Key performance indicators (KPIs) refer to a set of quantifiable measurements used to gauge a company’s overall long-term performance. KPIs specifically help determine a company's strategic, financial, and operational achievements, especially compared to those of other businesses within the same sector."

Just-in-time, or JIT, is an inventory management method in which goods are received from suppliers only as they are needed. The main objective of this method is to reduce inventory holding costs and increase inventory turnover.

Indian Oil Corporation Limited (IOCL), is an Indian government corporation. It is under the ownership of Ministry of Petroleum and Natural Gas, Government of India headquartered in New Delhi. The government corporation is ranked 212th on the Fortune Global 500 list of the world's biggest corporations as of 2021.

In its simplest terms, the average annual return (AAR) measures the money made or lost by a mutual fund over a given period. Investors considering a mutual fund investment will often review the AAR and compare it with other similar mutual funds as part of their mutual fund investment strategy.

ICRA Limited (formerly Investment Information and Credit Rating Agency of India Limited) was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency.

Gross National Product (GNP) is the total value of all finished goods and services produced by a country’s citizens in a given financial year, irrespective of their location. GNP also measures the output generated by a country’s businesses located domestically or abroad. It can be defined as a piece of economic statistic that comprises Gross Domestic Product (GDP), and income earned by the residents from investments made overseas.

Gross national happiness (GNH) is a measure of economic and moral progress that the king of the Himalayan country of Bhutan introduced in the 1970s as an alternative to gross domestic product. Rather than focusing strictly on quantitative economic measures, gross national happiness takes into account an evolving mix of quality-of-life factors.

Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.

First In, First Out, commonly known as FIFO, is an asset-management and valuation method in which assets produced or acquired first are sold, used, or disposed of first. For tax purposes, FIFO assumes that assets with the oldest costs are included in the income statement's cost of goods sold (COGS). The remaining inventory assets are matched to the assets that are most recently purchased or produced.

Exports are goods and services that are produced in one country and sold to buyers in another. Exports are incredibly important to modern economies because they offer people and firms many more markets for their goods. One of the core functions of diplomacy and foreign policy between governments is to foster economic trade, encouraging exports and imports for the benefit of all trading parties.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization and is a metric used to evaluate a company’s operating performance. It can be seen as a proxy for cash flow from the entire company’s operations.

Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of its common stock. The resulting number serves as an indicator of a company's profitability. It is common for a company to report EPS that is adjusted for extraordinary items and potential share dilution.

Direct Tax Code is set of rules that is going to replace the existing Income Tax Act (IT Act). It covers all taxes that is under the present IT Act including corporate income tax and personal income tax. Effort to create a DTC started from 2009 onwards.

CRISIL (formerly Credit Rating Information Services of India Limited) is an Indian analytical company providing ratings, research, and risk and policy advisory services and is a subsidiary of American company S&P Global. CRISIL, was the first credit rating agency in India, introduced in 1988 by the ICICI and UTI jointly with share capital coming from SBI, LIC and United India Insurance Company. In April 2005, US based credit rating agency S&P acquired the majority shares of company.

Compound annual growth rate (CAGR) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each year of the investment’s life span.

Business process re-engineering (BPR) is a business management strategy, originally pioneered in the early 1990s, focusing on the analysis and design of workflows and business processes within an organization. BPR aimed to help organizations fundamentally rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors.

Business process outsourcing (BPO) is a business practice in which an organization contracts with an external service provider to perform an essential business task.

BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange located on Dalal Street in Mumbai (Bombay). Established in 1875, it is the oldest stock exchange in South Asia, and also the tenth oldest in the world. The BSE is the 9th largest stock exchange with an overall market capitalization of more than 2,18,730 billion on as of May 2021.

Bharat Sanchar Nigam Limited (BSNL) is a government owned telecommunications service provider headquartered in New Delhi, India. It is under the ownership of Department of Telecommunications, Ministry of Communications, Government of India. It was incorporated on 15 September 2000 by the Government of India. Its top official is designated as Chairman and Managing Director who is a central government civil servant of the Indian Communication Finance Service cadre or a central government engineer of the Indian Telecommunications Service cadre. It provides mobile voice and internet services through its nationwide telecommunications network across India.