Default category for terms.
A
- - Appointed by a creditor under a specific power arising under the terms of a fixed or floating charge. The receiver's duty is to realise the value of the asset charged for the benefit of his creditor/client. A company can continue to trade while in receive -- A person authorised expressly or by implication to act for another, called the principal, who is, as a result of the authority delegated by him, bound by the acts of the agent. -- By law, a limited company must each year draw up an annual summary of its capital and shares, together with an up-to-date list of directors and members (shareholders) with their names, addresses and number of shares held, occupation and other directorship -- Companies which by some common link or bond are considered Associated. The most common occurrence is directorate associations. -- A statement from the auditors (accountants) that they have examined a business' books of accounts to check whether they have been properly kept and whether they represent a true and fair view of the company's trading. -- This is the amount of money that can be put into a Public company in the form of shares. For a Limited or Unlimited Company this is known as Nominal capital (the term Registered capital is also sometimes used.) -
B
- - Money owed to a company which is not recoverable and therefore written off as a loss. -- A comparison between total sales and those for which payment is not recoverable and therefore written off as losses. -- A statement showing the assets and liabilities of a business at a certain date. The balance sheet forms part of the accounts of a company, and is normally prepared annually. -- The information returned as a result of a written request which is sent to the applicant's bank asking for its opinion regarding the financial standing of the applicant. The response can take one or two weeks to be received and will be couched in predefin -- A person is declared bankrupt by a Court which may happen at his own request or as a result of action taken by a creditor. A receiver will be appointed and assets be realised as effectively as possible. -- A scoring system for assessing the continued risk on an existing loan account. The score is recalculated regularly (typically monthly) and is used in both collections and marketing activities. -- Defined by Bills of Exchange Act 1882,s. 1 as an unconditional order in writing, addressed by one person (the drawer) to another (the drawee and afterwards acceptor), signed by the person giving it, requiring the person to whom it is addressed to pay on d -- A receipt from a carrier given to a shipper or consignor, undertaking to deliver the goods upon payment of the freight, to the person described in the bill. The delivery of this document to the consignee is sufficient to transfer property in the goods. It -- A ratio which shows total debt as a percentage of shareholders' funds, and aims to measure to what extent the subject is financed by external funds. -
C
- - Cash on delivery; payment is due upon delivery of the goods. -- The general idea behind the word 'capital' is the money you started with or the money you have, but the term is often loosely used so its meaning should always be clarified. Combined with other words it can have a more precise meaning e.g: Nominal capi -- The company's resources are fully extended; shortage of cash. This is one of the terms used by banks when answering status enquiries. -- Cash in hand, either petty cash or current accounts at the bank. -- Consumer Credit Association. -- Consumer Credit Act, 1974 -- An abbreviation for County Court Judgment -- Consumer Credit Trade Association -- When a new Limited company (or Unlimited company) is being formed and all the formalities complied with to the satisfaction of the Registrar of Companies, he will issue a Certificate of Incorporation which then gives the Company its legal existence. -- A form of proceedings to enforce a judgment, which attaches to property, normally land or shares, owned by the debtor. The charging order operates like a mortgage in that it is usually used to secure payment by instalments. Upon default an order for sale -- Security in the form of stocks and shares, deeds of property or other acceptable substitutes which are deposited by a borrower as a guarantee that a loan will be repaid. -- When a Limited company is formed it is given a Company Number, individual to itself, which it keeps, even if it changes its name, until it is dissolved. All companies are required by law to show this number on their letter headings. -- Interest calculated on the principal sum of a debt, plus any interest that has accrued in previous periods. Each time interest is added, the total becomes the new sum on which subsequent interest is calculated. -- The contractual terms, usually in writing, upon which goods are sold and services supplied. Also known as Terms of Trade and Terms and Conditions. -- Usually a group of companies or firms working together on a project too large or complex for a single company to undertake; or several concerns forming a temporary joint organisation in order to achieve a common goal. -- Interest on late payment as stipulated in a seller's contract with the debtor. The seller should decide the rate of interest and credit period for the debtor, and should obtain agreement from the debtor to meet these terms. A seller may be challenged in a -- A company is said to have a controlling interest in another company when it holds over 50% of the shares carrying voting rights. -- The County Courts, since June 1991, have had jurisdiction to hear all liquidated claims. From 26 April 1999, under the new Civil Procedure Rules, there are different procedures applicable to claims, depending on their value, as follows: 1. small claims -- A concern or person may take another to Court for non-payment of debt, and judgment will be given in many cases against the claimant (the party bringing the action). A County Court Judgement is given for a particular amount, which may be for all or part o -- In certain circumstances the court may appoint a receiver to execute a judgment or to protect property, which is subject to a dispute. The receiver appointed by the court must comply with the order of the court in which his powers and duties will be defin -- The word 'credit' is derived from the latin word 'Credo', its meaning being 'I believe'. Credit is the power to obtain finance, materials on trust by promising to pay for them at some definite time in the future. -- Insurance against bad debts. This form of insurance has expanded since it became the practice for the insured to accept liability for an agreed portion of the debt, as otherwise there would be little to inspire the creditor to hurry the debtor for payment -- The information returned as a result of an enquiry to a credit reference agency. Information will be compiled from the electoral roll, CCJ data and commercial enquiries. -- A method that assigns a 'score' to various attributes of a potential debtor for assessing statistically the likelihood that credit will be repaid punctually. -- Cash or other assets readily convertible into cash (e.g. stocks, debtors, short term investment). -- Amounts which fall due for payment within 12 months of the Balance Sheet date (e.g. creditors, bank overdrafts, current taxation, etc.). -- A calculation made to show the liquidity of a business. Obtained by dividing current assets by current liabilities. The higher the ratio, the greater the protection for the trade creditors. -- That score which represents the boundary between accepting and rejecting an application for credit. This figure is movable and is determined by the credit grantor. -
D
- - Days sales outstanding; an average guide to the length of time it takes a company to receive payment for goods sold. It is a measurement obtained by calculating the number of days' or months' sales that are owed to the company. -- See D.S.O. -- A document recording the indebtedness of one party to the other, containing a promise to repay and, by way of security for that promise, a floating charge over a company's assets. -- A company which operates a debt recovery service for the recovery of overdue accounts, on behalf of clients. -- Scottish equivalent of an English Judgment. -- Under credit insurance this is the maximum amount of business that can be transacted with any one buyer without the formal approval of the insurer, subject to satisfactory credit references being obtained. -- The return paid to shareholders on their investment. (Usually in the form of a bonus payment every six months). -- A document enabling the person in possession of it to deal with the property described in it in any way as if they were the owner. -- A limited company that has never started, or has ceased, its trading activities (e.g. a subsidiary transferring its business to its parent or a fellow subsidiary), but has not been dissolved. Annual returns are still filed, but the accounts state that the -- Amounts due from group companies within the next 12 months e.g. repayment of a short-term loan. -
E
- - A business financial statement that lists revenues, expenses, and net income throughout a given period. Because of the various methods used to record transactions, the monetary values shown on an income statement often can be misleading. Also known as Pro -- Once a debt has been sued for successfully and judgment entered against the debtor there are various methods of physically recovering the money and those are enforcement methods. Examples are instructing bailiffs to levy execution, charging orders, attach -
F
- - Factoring is a financial service by which a concern operating as a 'Factoring House' or 'Factoring Agency' will buy outright the debts of a client. The latter is then relieved of losses it may incur because of slow payment or financial difficulties of a c -- A method of enhanceing payment terms over an extended period. -- A business unit formed for the purpose of carrying out some kind of trading activity. The term \firm\" is used in many ways -- Tangible and intangible assets with a relatively long life, acquired to produce goods or services and not intended for resale. Includes financial assets such as trade investments. -- A charge over a specific asset or type of asset, e.g. machinery, property, book debts, etc. -- The current book value of fixtures and fittings after allowing for depreciation. -- A charge created by a company over all company assets for the time being. The lender has no immediate right over the assets but upon crystallisation of the charge he or she can enforce against any or all of the assets covered by the charge. -
G
- - Accounting ratio of money borrowed compared with unencumbered capital. A company is said to be highly geared if a high proportion of their working capital is borrowed rather than invested. -- A scorecard which has been designed rather than statistically derived. These usually apply in situations where there is no (or insufficient) data available from which to develop a statistical scorecard. This is typically for new product launches. Also kno -- Goodwill only features in a company's balance sheet after it has made an acquisition. It represents the excess of the purchase price over the net worth of the acquisition and is depreciated on the balance sheet over a five-year period. Intangibles include -- Net sales less costs. -- A promise by one person to carry out the contractual commitments of another in the event of default. Must be in writing. -
H
- - A company formed for the purpose of exercising financial control over a number of operating companies by buying up all or the majority of their shares. A company has a controlling interest in another when it has acquired over 50% of its issued shares whic -
I
- - A business financial statement that lists revenues, expenses, and net income throughout a given period. Because of the various methods used to record transactions, the monetary values shown on an income statement can often be misleading. Also known as Ear -- A promise to compensate another for a wrongdoing, expense or loss incurred. To be distinguished from a guarantee which relates to the obligations of another and may not be a primary obligation. -- An inability to pay debts as they fall due, or where a debtor's total assets are exceeded by his or her liabilities. The law in this area is regulated by the Insolvency Act 1986. To be declared insolvent, debts due to a creditor or creditors should be in -- Patents, trademarks, goodwill etc. -- Any interest charges incurred, normally shown as a net figure after deduction of any interest received. -- Assets more usually found in a balance sheet under fixed assets but could include: * Investments in, and amounts due from subsidiaries (Gross). * Investments in, and amounts due from related companies (Gross). * Trade Investments (Gross). * Other li -- Money invested in associated companies or any other long-term investment. Usually stated \at cost\" -
J
- - When two or more persons declare themselves jointly and severally bound they make themselves liable to a separate and individual action as well as joint action in the event of default. If one person is pursued for the whole debt he can claim a contributio -- A partnership set up between two or more companies, usually joining specific areas of their activities together, and usually to enhance their capabilities and competitiveness in particular areas or markets or to undertake a specific project. -- This is a company that is quoted on the Stock Exchange and whose shares are owned by members of the public. -- An abbreviation for County Court Judgment. A concern or person may take another to Court for non-payment of debt, and judgment will be given in many cases against the claimant (the party bringing the action). A County Court Judgment is given for a particu -
L
- - This Act was introduced to encourage purchasers to pay on time by giving businesses the right to claim statutory interest if another business pays its bills late. For debts pertaining to contracts made between 1st November 1998 and 6th August 2002, the le -- An LPA receiver is appointed by a lender who has a fixed charge over the property under the statutory power given in section 109 Law of Property Act 1925. The powers of the LPA receiver are as follows: * To demand and recover rent; * To give receipts -- Where the ownership of a company changes through a party or number of parties acquiring the controlling interest of the company using borrowed funds, giving the assets of the company as security. Repayment is made using future trading profit. Some consult -- A company in which the liability of the members in respect of the company's debts is limited. It may be limited in shares, in which case the liability of the members on a winding-up is limited to the amount (if any) unpaid on their shares. This is by far -- The liability of shareholders in a limited liability company, private or public, is limited to the face value of the shares held. If therefore, the shares are fully paid, the shareholder has no liability for the debts of the company. If the shares are par -- Another term for a limited company. -- A limited liability partnership is a general partnership that has been registered with the Secretary of State as a limited liability partnership. A partner is not liable for professional malpractice that does not involve that partner. -- The term used to describe the winding up of a company, usually by reason of an inability to pay its debts, regulated by the Insolvency Act 1986. It involves the realisation of the company's assets and the distribution of any proceeds to its creditors. -- The insolvency practitioner duly appointed to wind up and settle the affairs of a company being wound-up. -- The excess of liquid assets over liquid liabilities. -- This is an official British Government publication. In addition to containing information such as official Government announcements, it also lists details of bankruptcy proceedings, dissolutions of partnerships, winding-up orders against companies, notice -- A term used to describe a swindling organisation, in business for the purpose of obtaining goods on credit, selling the proceeds, (frequently under cost) and then absconding or failing, without having paid. -- Amounts not falling due for payment within 12 months of the balance sheet date. This is a long-term liability. -
M
- - The claim on a company's assets due to a minority shareholder/s, can include proposed dividends as yet paid or claimed. (Normally included as a long term liability). -- Management Information Systems -- Monopolies and Mergers Commission -
N
- - Profit (or loss) after tax less extraordinary items. -- Indicates the financial strength of a company and comprises: * Issued capital * Share premium A/C * Capital reserves * Any general reserves * Profits and losses etc. (revenue reserves) * Grants, donations etc. Net worth is calculated as: total -- This is the amount of money that can be put into a Limited or Unlimited company in the form of shares. For Public companies this is known as Authorised capital. The term Registered capital is also sometimes used. Nominal capital is divided into shares whi -
O
- - The official receiver is an officer of the court and Civil Servant employed by the insolvency service to manage bankruptcies and compulsory company liquidations. The term 'Official Receiver' should never be confused with the administrative receiver appoin -- Gross profit or loss less selling/administrative expenses, payroll, depreciation/amortisation, etc. -- A business financial statement that lists revenues, expenses, and net income throughout a given period. Because of the various methods used to record transactions, the monetary values shown on an income statement often can be misleading. Also known as pro -- These generally carry no fixed rate of dividend, unless they are deferred ordinary shares. They may receive a dividend, in accordance with the amount of net profit made by the company (or deriving from previous years' profits retained in the business) but -- Includes Bills of Exchange, bank certificates, taxation, recoverable. -- Including hire purchase agreements, proposed dividends, sundry deposits, social security payments, National Insurance payments etc. -- Income other than that from the sale of goods or services e.g. investments. -
P
- - A company that owns or controls subsidiaries by buying up all or the majority of their shares. A company has a controlling interest in another when it has acquired over 50% of its issued shares which have voting rights. Where a parent company does not ope -- A type of business unit in which two or more persons join together to carry on some form of business activity. In what is termed an Ordinary or General partnership, all the partners jointly share the management of the business though their percentage of p -- These normally carry a fixed rate of dividend which is paid before the dividend on Ordinary shares. There are many types of preference shares, such as non-cumulative, cumulative, redeemable, etc. Preference shares sometimes do not carry voting rights. -- Rates, rent, insurance premiums, etc. normally payable in advance. -- A private company is any registered company that is not a public company. The shares of a private company may not be offered to the public for sale. The legal requirements for such a company are less strict; for example, there is no minimum issued or paid -- Can be: * An invoice drawn up by seller and sent to the buyer to confirm the details of a contract; * A polite reminder that a debt will be due for payment; * For despatch to an agent when goods are sent on consignment basis; * By an exporter to sho -- Profit is the excess of income over expenses. Loss is the excess of expenses over income. -- A business financial statement that lists revenues, expenses, and net income throughout a given period. Because of the various methods used to record transactions, the monetary values shown on an income statement often can be misleading. Also known as Ear -- A measurement of trading success – the calculation of profit as a ratio to (a)net sales (b) capital. -- Individual ownership or sole proprietorship; it is the type of business unit in which only one person is liable. It is the simplest form of business organisation. The owner is responsible for all management decisions, takes all the profits and bears all t -- A company registered under the Companies Act (1980) as a public company. Its name must end with the initials `plc'. It must have an authorized share capital of at least £50,000, of which at least £12,500 must be paid up. It may offer shares and securities -- Information obtained on business concerns etc. from sources generally available to any person who may be interested in such information. The sources of this type of information are, for example, the Register of County Court Judgments and the London Gazett -
Q
- - Assets held in cash or in something that can be readily turned into cash (e.g. deposits in bank current account, trade debts, marketable investments). The ratio of these assets to current liabilities provides an assessment of an organisation's liquidity o -- A term used to measure the short-term ability of a business to meet its obligations. It is calculated as current assets less stocks and work in progress, divided by current liabilities (also known as Acid test ratio). -
R
- - here are three types of receivership: An administrative receiver who is appointed by a debenture holder under a fixed or floating charge debenture; A law of property Act receiver who is appointed over property under The Law of Property Act 1925; -- The practice of declining an applicant for credit wholly on the grounds that he/she lives at an address which is deemed to be unsatisfactory. This practice is outlawed by the Office of Fair Trade. (The name derives from the original practice of drawing a -- Is the amount of money that can be put into a Limited or Unlimited company in the form of shares. The term Nominal capital is also sometimes used. For Public companies this is known as Authorised capital. Registered capital is divided into shares which -- A registered company is registered under the Companies Act, with the Registrar of Companies. A company may be registered either as limited private company, a public limited company or an unlimited company. See also, Private company. -- The address of a company at which all documents must be served, in order for service to be effective. It is recorded at Companies House and can be found by referring to company headed paper or carrying out a company search. -- The value of net assets over and above the issued capital. -- Also known as the P& L account or revenue reserves, represents the accumulated net income, not paid out as dividends etc, from previous financial years, and not transferred to the other reserves, and carried forward to the balance sheet. Retained earnings -- The accumulated income, not paid out as dividends etc., carried forward to the current years' balance sheet. -- Also known as a Romalpa clause or a Reservation of title clause it is a clause reserving the seller's title to the goods until those goods are fully paid for. It imposes a duty of care in respect of the goods on the buyer and purports to entitle the selle -- When a company commences operations it will not normally be in the position to file an annual return. Therefore if the persons forming the company want to take up and pay for shares, they make what is called a return of allotments, a simple form showing h -- Amount arising from the appreciated value of property; the difference between the former book value of property on the balance sheet and the present (revalued) book value of the property. -- An issue by a company of new shares which are offered, usually at a price below current market value, to existing shareholders of the company, in proportion to their present holdings (usually done to raise additional capital). -- Also known as Retention of title clause or a Reservation of title clause it is a clause reserving the seller's title to the goods until those goods are fully paid for. It imposes a duty of care in respect of the goods on the buyer and purports to entitle -
S
- - Secured charges are created when a company borrows money against security. The company is then required to register information about such charges at the Companies' Registry. The reason for this is to show ordinary unsecured creditors that in the event of -- A creditor who holds title to an asset of his debtor, which can be held as security for a debt and sold if necessary to recover the debt (e.g. a company taking out a mortgage with a bank to create overdraft facilities, will put up its property as security -- Collateral provided by a debtor to support his or her promise to pay. A creditor may require some rights over valuable property in order to lend or supply, e.g. a charge over land. The security will be used to satisfy that creditor in the event of default -- The expenses other than financial or payroll e.g. rates, telephone, travel, etc. -- A form of defence whereby a debtor may acknowledge the claimant's demand but pleads his own claim in order to extinguish the claimant's demands either in full or in part. -- The amount paid to a company by shareholders, in cash or other consideration, over and above the nominal value of shares issued to them. -- The nominal capital of a Limited company is divided into shares which may be in units of £1 or more, or 50p or as small as 0.05p. There are two main types of shares, ordinary shares and preference shares. Ordinary shares: These generally carry no fixed -- A limited company that has never started, or has ceased its trading activities (e.g. a subsidiary transferring its business to its parent or a fellow subsidiary), but has not been dissolved. Annual returns are still filed, but the accounts state that the -- An individual who runs an unincorporated business on his or her own. Generally, a sole proprietor of a business is known as a sole trader and a sole proprietor of a professional practice is known as a sole practitioner. -- A scorecard which has been designed rather than statistically derived. These usually apply in situations where there is no (or insufficient) data available from which to develop a statistical scorecard. This is typically for new product launches. Also kno -- A company formed by a special Act of parliament. -- The right to interest on commercial late payment under the Late Payment of Commercial Debts (Interest) Act 1998. For debts pertaining to contracts made between 1st November 1998 and 6th August 2002, the legislation is referred to as the Late Payment of Co -- Represents the current estimated value of stocks after allowing for any deduction in respect of damaged or obsolete stock together with the Directors' assessment of the value of the work in progress. -- Measures sales turnover as a ratio of stocks, and is intended to show how fast stock is moved. The higher the score, the more liquid the position. -- A company controlled by another company, the controlling company holding over 50% of the issued voting shares of the subsidiary company. -
T
- - An offer by one company to another, for a large proportion or all of its shares, to bring it under control. The offer sometimes consists of a proportionate number of its own shares, together with a cash payment per share, in exchange. -- Where a company has a deficit of shareholders funds but can have a positive working capital or long-term borrowings allowing it to continue trading. -- The contractual terms, usually in writing, upon which goods are sold and services supplied. Also known as Conditions of Sale. -- A legal proceeding to recover money that is owed to the debtor by some third party. -- A total of the current and fixed assets. -- Amounts currently owing for goods or services received, whether invoiced or not. -- The address of the company where business is carried out if different from the registered office and where the company's assets are likely to be found. -
U
- - Shares can be issued but only partly paid and the difference between the face value and the amount paid is known as uncalled capital. -- A person who has not been granted his discharge or formal permission to resume business dealings. An undischarged bankrupt cannot seek credit over the sum of £50 without disclosing his position to his creditor, and he may not be a director of a company or -- A liability to pay all the debts incurred by a business. For a sole trader/proprietor the liability of the owners is not limited to the amount the owner has agreed to invest. All debts of the business must not only be paid out of the assets of the busines -- A creditor who has no security for his debt and will therefore rank with other unsecured creditors on an equal basis with no preference in the event of a liquidation or bankruptcy. -
W
- - The abandonment of a right by one party so that afterwards he or she is prevented from claiming it. It is possible to waive rights by conduct or by express agreement. -- Promise or covenant offered usually by a seller to a buyer to describe the goods or services offered and the remedies available to the buyer in the event of default. -- An order made by the Court that a company should be wound-up and a liquidator appointed to wind up its affairs, after an interested person or company has successfully petitioned the court for this action. -- A petition presented to the Courts if a person or company thinks that a company should be wound-up and enter into compulsory liquidation. In many cases one company will petition to wind up another because it is owed money and cannot recover the debt. -- The excess of current assets over current liabilities. Used to indicate the funds available for conducting day-to-day business. -
Z
- - A technique for forecasting corporate failure based on financial ratios extracted from company accounts. -
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