The amount which could be recovered from an investment project if it were immediately to be abandoned. The simple decision rule is that a project should be abandoned if its abandonment value exceeds the net present value of its projected cash flows.
An application of the principle of management by exception by which stock is seperated into categories by value of total annual usage which is also called as ‘Split Inventory System’.
The ‘line’ is that dividing the profit and loss account from the appropriation a/c.
Any form of advertising for which a commission is payable to a recognized advertising agency operating on behalf of his client.
Accounts which, while covering the related full financial period, are not fully detailed financial statements. Such accounts may be used for giving information in a summarized form e.g. to its employees.
To run away, often taking property or money.
The conduct of a person who either abstains from the unproductive use of what he can command, or designedly prefers the production of remote to that of immediate results.
The designatory letters of an associate member of the Institute of Chartered Accounts in many countries
The designatory letter of an associate member of the Chartered Association of Certified Accountants.
A method of calculating depreciation in which larger proportion of an asset s value is written off in the early part of its life than in later parts. Example of this method is reducing balance method.
Training or (in most cases) retraining the aim of which is to help adult workers to acquire skills which traditionally have been acquired by apprenticeship in a much shorter period than is usually taken by an apprenticeship. Such programmes are usually g
A provision in an agreement for the repayment of a loan by installments that if a specified number of installments are not paid then all the outstanding payments are due immediately.
In statistical quality control, the extraction of a sample from a lot of goods or materials to be inspected for the purpose of deciding whether the whole lot will be accepted or rejected.
The level of access, which is granted to users of a system e.g., read a file only, or writes to a file.
A bill of exchange which has been drawn on and accepted by a reputably party for the purpose of giving value to the bill so that it can be discounted.
The activity of preparing and auditing the financial records and statements of organizations.
The principles and techniques used in establishing, maintaining and analyzing the records of the financial transactions of a business. Accounting is primarily concerned with devising recording methods, keeping records, internal auditing and reporting to
The journal of the American Accounting Association, which is published quarterly and gives, learned articles on accounting and on accountancy education.
A term appearing against the opening on a statement sent by a supplier to a customer, which indicates that this amount is brought forward from a previous statement from which full details may be obtained if required.
A detailed statement sent by an agent to his principal following the sale of goods by the agent on behalf of the principal. It accounts for the money received from the sales, stocks remaining and any expenses or commission retained by the agent out of th
Units in a unit trust where the income is reinvested in further units rather than being distributed in cash.
General term in psychological testing, specially used in the USA, for a test which measures achievement in a particular occupation.
It is also known as quick ratio or liquid ratio. The determination of the ratio of total cash, debtors and the market value of marketable investments of a business to its current liabilities.
Advance Corporation Tax.
A work-study sampling technique in which a large number of planned immediate observations is made over a given period of time of a group of machines, processes or workers.
An action by a debtor which leads to a presumption of insolvency and therefore legally allows a creditor to instigate bankruptcy proceedings.
A valuation of contingent liabilities based on probabilities, which is commonly used in the field of insurance and pension funds.
A professional person employed by insurance company or a pension fund concerned with assessing the financial implications of insurable risks.
The value added to materials by the process of production. It is calculated by deduction from the gross output, the cost of materials, fuel, etc. used in the production process. The value added on net output is the fund out of which salaries, wages, dep
A premium charged in respect of an insurance policy where its terms are amended at the request of insured after the original premium has been paid. The amendment may be of the risk insured against or of the value of the property insured.
In Latin, it means, "for this". Refers to a limited situation. For example, an adhoc committee is one limited to a specific intention and may be dismissed on completion of its task.
A professional person appointed to examine insurance claims in order to determine their validity and confirm their amount.
All management expenses concerned with directing and controlling an organization, which are not directly related to research, development, production, distribution and selling activities.
An important classification of cost within the profit and loss account. It contains costs, which directly relate to administration and might include telephone, office salaries and postage.
A person appointed to deal with the affairs of a deceased person where there is no executor. This might occur because no executor was named in the will or because the named executor is unable or unwilling to act. And also in the cases where no will was
The feminine form of administrator.
Abbr. Automatic Device for Mechanized Order Selection. Term used to describe machinery used in an integrated warehouse which checks product availability, selects correct quantities of specific goods, records stocks and shortages and in conjunction with c
Abbr. Automatic Data Processing.
In proportion to value. Value added tax is an example of an ad valorem tax.
The action of a trustee in using funds from a trust for the benefit of a beneficiary in advance of the time when the benefit would normally become available.
A difference between an actual expense or cost and the amount of a budgeted or standard cost such that its effect is to reduce profit below that planned.
A document along with a delivery of goods, which advises as to the kinds, quality and, quantity of goods delivered. It does not contain any details of price or total cost. It should be verified that it agrees with the actual goods delivered and with t
A credit card issued on a condition that specified amounts are paid by the issuer to a named charity. The card is usually produced in a characteristic style to indicate this and so also gives publicity to the charity concerned when the card is used.
Words used in a policy of life assurance to signify that the insurer has already seen proof of the age of the insured, usually a birth certificate, and that no further proof of this will be required in the event of a claim.
An allowance given against the income of an individual while calculating the amount of income tax due when the taxpayer is over the age of 65.
An analysis of the debtors of a business, which shows how old each and every element of debt, is.
A relief given against inheritance tax in respect of property used for agricultural operations.
Both a verbal and non-verbal general intelligence test (and also an element of numerical aptitude test), taking about an hour to conduct and used with different norms according to the level being tested.
Abbr. American Institute of Certified Public Accountants.
Stands for attention, interest, desire, and action. A well-known mnemonic used in training salesmen, to indicate the correct sequence for a selling interview.
Abbr. American Institution of Industrial engineers.
An international algorithmic procedure-oriented computer language.
A list of the holders of partly paid shares in a company at the time of its closure.
A piece of paper stuck on to a bill of exchange and similar negotiable instrument to provide more space for endorsements when the space originally available on the back of the document has been used. It is necessary only for a document, which is circulat
A person responsible for the financial control of an institution, providing a humanitarian service, such as a hospital or a home for the aged.
A section of shares traded on the stock exchange including the shares of large companies, which are dealt in every day.
A release from obligations and liabilities arising out of past actions.
The process of gradually extinguishing a liability, debt over a period of time. The process of absorbing into costs over a predetermined period the value of wasting assets such as leases or royalties.
The breakdown of a total figure into its component parts. In accounting, we meet the analysis of Sales.
Term applied to audit procedures prepared to test the fundamental consistency and probability of a set of accounting statements. It will include the calculation of ratios and comparisons with other similar types of business. Analytical review is the su
Words which may be required for a period to be added to the name of a company whose capital has been reduced.
A person who provides finance for theatrical productions.
A document which must be submitted annually by every company to the registrar of companies. It includes address of registered office, location of registers of members and of debenture holders, etc.
A person who receives an annuity.
A fixed annual payment that may continue indefinitely, but frequently will continue only during the lifetime of a named individual.
A method of providing for depreciation, which takes into account the interest forgone by the funds, invested in the depreciating assets.
To give a document a date before that on which it was actually executed.
Betting on the outcome of a horse race where the odds are determined at the time the bet is placed, rather than the time of starting of the race. Ante post betting is available on selected important races only. It has the disadvantages that the stake is
A description of measures, usually in the form of legislation, the aim of which is to prevent taxpayers from avoiding the payment of tax by methods which, although technically legal, were not intended while drafting the original legislation.
Description of a policy adopted by the government with the intention of preventing or reducing inflation
Abbr. Acceptable or Average Outgoing Quality Level.
The process whereby a single sum is divided according to some exact method into portions, which are then attributed to some activity, cost centre or person. The term may arise in one of a number of different connections.
An amount set aside out of profits for a specific goal.
Abbr. Annual Percentage Rate.
A programming language developed in USA and used for the production of tape for controlling numerically controlled machine tools.
A process whereby an investor buys and sells securities and adjusts financing arrangements so as to take advantage of market inequalities in risk and return. The main purpose behind it is to bring the market into equilibrium.
One who engages in arbitrage.
The process of settling a specific issue or complaint between two or more parties, by submitting the dispute to an fair person or group of people chosen by the parties or to a neutral agent appointed by statutory authority. The decision is binding on both
An agreement made by an individual or a company with account payables whereby the latter agree to stop from pressing for immediate settlement in return for a promise of future action, which improves their chances of recovering the debt.
A statistical term for a methodical grouping of values according to magnitude, usually from the smallest to the largest.
A document, which is required by law before a company, may be registered. It contains the rules and regulations that will govern the legal obligations and the internal working of a company.
An enterprise or organization that has powers, either granted by law or by custom, that resembles those of a natural person.
A transaction, which has, of itself no commercial justification but which has been undertaken purely to gain some benefit deriving from the form of the transaction.
A process by which the pureness of a precious metal is determined and certified.
The arrangement of machines, equipment, materials and employees which allows the work in process to progress in a particular order from operation to operation until the process or a phase thereof has been finished, or until the product has been assembled.
A security whose holders have agreed to some conduct so that the agreement is binding on a purchaser of the security. Assented Stock may have different market value from non-assented stock.
Securities represented by tangible, valuable assets.
The extent to which a share is represented by valuable assets.
A process whereby a company acquires a controlling interest in another company for the purpose of disposing of its assets. The opportunity arises where the management of the company taken over has underutilized the assets so that the share price is below
The transfer of rights owed by another to some third party. For an assignment to have legal effect it must be absolute, in writing and be communicated to the one owing the right.
A method of job evaluation developed for professional and technical jobs in which the assignments that the job carries out are graded according to complexity, experience required and so on.
A company in which an investment fulfilling certain conditions is held which are as follows, 1. The investing company’s interest in the associated company is effectively that of a partner in a joint venture, or 2. The investing company’s investment in t
The consequence of a court order whereby a portion of a person’s wages or salary can be deducted before payment and applied in settlement of an responsibility to a third person.
A social security benefit payable to those who are bound to attend on an invalid.
The power to handle the financial affairs of another with the same authority as they would themselves.
That part of the total profit currently estimated to arise over the duration of a long-term contract which fairly reflects profits arising from the work done to date.
The risk that, although an audit has been properly carried out, a matter which materially affects the truth and fairness of the accounts is overlooked.
The chain of evidence, which leads an auditor from an item in the accounts to an underlying, documents verifying the transaction.
Total value of a company’s share capital as registered for the time being, all of which need not have issued.
The use of part of sales proceeds to provide the means of payment for capital expenditure, i.e. that part which is left over when all cash expenses, taxes, and dividends have been paid.
1. The execution of recording operations of an accounting nature by electronic equipment based on a computer, whereby all stages from original record to ultimate report are carried out without human intervention. 2. The systematic order of operations per
A type of network analysis technique developed by a company for solving problems involving the allocation of resources and the scheduling of activities by time periods in order to produce a realistic estimate of completion dates.
The provision by means of a computer linked machine of services normally provided by the counter clerk. In order to use the service a customer has to insert a special plastic card into a machine and key in a personal identification number. The machine wil
A system of rapidly producing critical path analysis and pert networks by using a computer.
The maximum average or acceptable quality of all lots passed by an inspection system, using sampling methods. It may also be expressed in terms of a percentage of defective items.
To give effect to some agreement as though it had been made at a date earlier than its actual date.
Tax relating to a period in the past, which was unpaid then because crooked or inaccurate returns were made.
One who supports a venture by financing it.
Synonym for bribe.
An adjustment to accumulated depreciation to allow for increases in the money value of an asset occurring since the provision arose.
The difference between the price of a commodity for immediate delivery and its price for delivery at some specified future date.
A binding promise to pay executed by an accused person or another person who will become enforceable if the accused person fails to turn up for trial.
An officer of the court whose duty is to enforce an order whereby a person’s property is confiscated for settlement of a debt.
A value calculated for a country as a whole, which represents the difference between its payments to other countries, and those it receives from other countries.
An amount deducted from a profit subject to tax to allow for the fact that the actual depreciation incurred in respect of fixed assets has proved to be greater than the total of capital allowances given.
An amount, which becomes chargeable to tax when capital allowances given exceed the total depreciation incurred in respect of fixed assets.
Stratified ranges of values, e.g. tax rates are divided into bands so that tax is at one rate on income up to a certain level and a higher rate on income up to a certain level
A chart presenting information in strata or layer form.
An instruction by the customer of a bank to make a regular fixed amount be paid to some person or organization and charged to his or her account.
A system by which transfer of money between accounts held at different banks can readily be made.
The rate percent at which the central bank will discount approved Bill of Exchange.
A statement explaining the difference which occurs between the balance in a bank account shown on the bank statement issued by the bank i.e. passbook, at a particular date and the balance shown at the same date by the cash book.
It is preceded by insolvency. A legal condition imposed by a court, in which the affairs of a debtor are placed under the control of a receiver, appointed to act to the benefit of the creditors.
Shares of a company having such wide-ranging interest that its performance can be taken as indicative of the performance of the economy as a whole.
The starting point for the calculation of an index. It is normally set at a value of 100.
A rate of interest quoted by a bank from which all its other rates are determined.
A level of stock regarded as the irreducible minimum with which business can operate.
A type of predetermined motion time system developed by P. Presgravse and G. B. Bailey in Canada in 1950. As with other predetermined time systems all motions which can or may be performed in the course of productive service or office work are listed and
That pension paid by the state and receivable by all persons of a particular age. Many retired people will receive a pension in excess of the basic pension because of additional contributions they have paid.
The lowest rate of income tax and the rate paid by the majority of taxpayers on their marginal income. It also determines the amount of advance corporation tax, which a company will pay.
A work measurement technique developed by ICI Ltd. for non-repetitive work.
A system of delivered pricing in which the price quoted by the seller is the factory price plus the cost of shipping from one or more places called basing points, from which goods may or may not be actually shipped.
A collection of items (shares, currencies) used for the purpose of calculating an index.
A statistical theorem attributed to Thomas Bayes, an eighteenth century contributor to probability theory. It provides a basis for solving certain types of problem. The Bayesian approach is concerned with the subjective view of probability.
A stock market term for a person who seeks to make a profit out of a falling market. This is achieved by selling shares that are not actually held with the aim of buying later, at a lower price, just before delivery is required
To induce the seller to decrease the price by a process of hard negotiation.
A stock market term used for a transaction whereby the possessor of a security sells it on one day and buys it back on the next. The object of this transaction is to establish a profit or loss for the purpose of capital gains tax.
An incentive wage system first introduced in 1911 for determining earnings in terms of the number of ‘man minutes’ required to perform a specified job or operation based on a predetermined measured standard.
More commonly used term for barometer stock in USA.
Appropriations of profit or capital expenditure which have no effect on the reported profits of the current year. The line referred to is that separating the profits and loss account from the appropriation account.
1. A level or a point in a scale or range against which performance can be evaluated 2. May also refer to job evaluation and job grading.
One who, although not the legal owner of a property, nevertheless has a right to all the benefits that would accrue to a legal owner.
An amount left to a person or organisation under a will.
A statistical method based on binomial distribution theory which is used to determine the number of times a specified event will occur in a given number of controlled experiments which can have but one of two possible outcomes, and where it has a known pr
Abbr. Business Expansion Scheme.
The designation used for the second rank of shares traded in on the stock market. A factor used to determine the appropriate hurdle rate to use in appraising a risky investment project.
The growth in the value of land by development.
An offer to make a purchase at a stated price.
An application of competitive strategy through analytical study of the standpoints, attitudes and resources of companies or groups seeking to purchase other enterprises.
The price offered by one seeking to buy securities. The term is applied to the lower of the two prices quoted by a stockjobber or the managers of a unit trust. The higher price is known as the offer price.
The time on 26th October 1986, London stock exchange fundamentally changed its form of organization. From that time, member firms could have a dual function acting as both broker and jobber. Prior to this a firm had, by the rules of the Exchange, to be ei
A numerical code used for preparing computer programs. It makes use of only two digits, 0 and 1. Numbers larger than one in any column are indicated by adding one unit and carrying to the left, e.g. Decimal Binary 0 0 1
An effort began in the late 1960s to increase the ownership and control of business by black people. Its objective is to improve the job market, and condition and status of the black community.
Funds which cannot be transmitted from one country to another because of controls on the exchange of foreign currency.
A sum of money, which is paid by central government to a local authority as a contribution to the total sum, required for it to discharge its functions.
A share in a company of established and high reputation which is considered to be a sound investment.
Abbr. Basic Motion Time.
Property which has no owner. Such a situation may arise where a company is wound up but some of its shareholders cannot be traced.
A place for the safe storage of dutiable goods on which duty has not yet been paid
The practice of selling fixed interest securities just before an interest payment is due and then re-buying immediately afterwards. Since the price of such securities includes an amount which reflects the accruing interest, the effect of this is to conver
One who engages in the activity of bookmaking.
The practice of accepting bets on a horse race or similar event such that, whatever the outcome, the bookmaker will end up with a profit. This is done in such a way that losing bets will be sufficient to cover winning bets and also leave a margin.
The value at which an asset is shown in the accounting records as distinguished from its intrinsic or market value. It is nothing but original cost less the accumulated depreciation.
A type of ledger in which the record on each account moves horizontally in columnar sections assigned to consecutive accounting periods.
The process whereby the master of a ship can borrow money that is required urgently on the security of the ship itself, which, in effect, is thereby subject to a mortgage.
Synonym for purchase day book.
A reward offered with the intention that it will influence some one to render a desired action.
The French Stock Exchange in Paris.
Fundamental and drastic design of an organization s business processes to achieve improvement in performance. The idea behind BPR is not simply to improve the efficiency of an existing process but to ask whether it needs to be done at all, to ask whether
A type of GD in which members of the group are encouraged to make as many imaginative and creative ideas and suggestions in a time as short as possible under a chairman.
Some willful action or omission of action by a trustee which causes loss to a beneficiary. A trustee who carefully and after taking appropriate advice makes an investment, which proves to lose money, would not be guilty of a breach of trust. One who made
The dividing line between an income which is inadequate to support life and one on which survival is just possible.
A graphic representation normally used to show profitability or otherwise of an undertaking at various levels of activity.
Level of working performance at which bonus pay commences.
The point at which neither profit nor loss is made as shown by a breakeven chart.
The value of a business on the basis that it will be terminated and its assets sold separately. If a business is successful its break-up value is likely to be considerably less than its value as a going concern.
A temporary loan given to cover the gap between the purchase of an asset and the sale of another asset, the proceeds of which are required to finance the purchase.
A proprietary name for a method of classifying and coding stores and parts numbers.
In work-study, a series of numerical indices from 0 to 100 given to various rates of work.0 rating corresponds to no activity and 100 rating to the measured desirable standard or level of activity.
Office from which airline tickets can be obtained at reduced prices.
A means of controlling the activities of an enterprise by carefully forecasting the level of each activity and converting these estimates into monetary values. The actual costs and revenue from each activity are periodically reviewed against the estimates
A stock of materials retained for the purpose of maintaining regular supplies in the event of a scarcity.
Building societies are non-profit making mutual organizations. A financial institution whose main service is to borrow money from savers in order to lend it to persons wishing to purchase a house. It takes several savers to finance one borrower and it is
A stock market term for the one who purchases shares in the hope that they may subsequently be sold at a profit
Precious metal, either gold or silver, held in the form of bars as a store of value.
A term applied to any market, but especially the stock market, where business is active and there is an inclination for prices to rise.
A synonym for overhead which is commonly used in the USA.
An office where foreign currency can be exchanged into the currency of the country where it is situated.
The person in charge of the finances of an organization. The term is most commonly used in connection with schools, colleges and such institutions
. Distribution management 2. The application of mathematical and statistical methods to all activities within an organization concerned with the movement of goods and personnel and the coordination of supply and demand. The overall objective of logistics
A long-term plan for the policy and operation of a business. It is more comprehensives than a budget and a budget and for a longer period.
An institution, often a department of a university, where advanced study and research into the processes of business are conducted.
A scheme under which subscribers to the shares in qualifying new companies could obtain relief against income tax for the full amount of the investment.
An investment strategy whereby an investor adds to a portfolio of shares as and when this seems appropriate or when funds are available and then retains these investments indefinitely.
The purchase at an auction of the goods by the original seller. This is done in order to prevent the sale to another person at an unrealistically low price
There is oversupply of the product, as a result of which the buyers are in a stronger bargaining position than sellers. Such Market condition is called as Buyer’s Market.
The purchase of a business by some group which is already involved in its operations. A management buy-out occurs when the existing salaried managers buy the business.
Persons leaving a pension scheme before the normal age for retirement especially for a job with another company.
Income which arises from some personal remunerative effort. Thus a salary, a person receives from an occupation is earned income, but interest received from an investment is not.
A tax relief that was, at one time, given against earned, as opposed to unearned, income.
The after-tax profits of a company attributable to its ordinary shareholders.
A company’s net profit attributable to ordinary shareholders divided by the number of shares in issue.
The rule in the calculation of state retirement pensions the application of which has the effect of reducing pension payments by an amount dependent on any earnings from employment after retirement age.
The earnings per share of a company expressed as percentage of its current share price. It thus represents to the investor the amount that is being earned on his or her behalf as a yield on the investment currently embodied in the shares.
Abbr. Economic batch Quantity.
Abbr. Export Credit Guarantee Department.
1. The analysis of economic phenomena and the formulation of economic hypotheses in mathematical terms in such a way that they can be statistically tested against observation. 2. It forms the basis of a large part of operational research theory. It is us
The length of time over which an asset may profitably be used. When the cost of operating an asset rises above the revenue which it generates it has exceeded its economic life and should not be kept in use.
The size of quantities or batches to be manufactured or purchased taking into accounts the costs of production or acquisition and holding stock.
Letters standing for Estate Duties Investment Trust.
Letters standing for electronic data processing i.e. the practice of using computers for the storage, retrieval and classification for information.
A market in which prices respond immediately to available information. There is considerable evidence that the stock exchange acts as an efficient market.
Assessment of the worker’s rate of working relative to the observer’s concept of the rate corresponding to standard rating. The observer may take into account separately or in combination, one or more factors necessary to the carrying out of the job, such
This is an empirical rule, which describes a common tendency, particularly in inventory control. It suggests that 20 percent of the stores account for about 80 percent of the total stores value. It can also be applied to customers and suppliers.
The movement of money effected not by physical means but by means of information sent electronically. An account could, for example, be debited in the computer records of one bank and the information sent by telephone line to the computer of another bank
An income tax code number issued by an Inspector of Taxes to an employer for PAYE purposes for an employee whose tax allowances have not yet been determined. Such a code would give effect to the personal allowance for a single person but to no other allow
Abbr. Equivalent Mean Investment Period.
A scheme adopted by a company whereby its employees can acquire shares in the company for which they work. These may be issued free of charge in production to salary and length of service or they may be purchased by the employee at a favourable price.
Letters standing for European Monetary System.
Some liability which attaches to an estate and thus imposes a burden on its owner. The obligation to pay ground rent on a leasehold property is an example of an encumbrance.
A form of life assurance policy under which the sum assured is paid either on death or on survival until a specified date. Endowment policies usually run for a maximum of between 20 and 30 years. A policy may be described as a ‘with profits’ policy. In th
A letter addressed by an accountant to his or her client setting out the exact terms of the agreement between them at the time when the services of the accountant are first engaged. Its importance is that it will define clearly the scope of the work under
A concept of accounting which sees a business as an entity in its own right separate from its managers or its proprietors. In case of a limited company, it is a separate legal person from its shareholders. In case of a sole trader, however, the legal enti
Abbr. Economic Order Quantity.
Electronic point of sale. It refers to the system whereby a customer in a shop can pay for goods by having a credit card or debit card ‘swiped’ through a machine, which communicates directly to their charge or bank account.
An apportionment of income received by a trust between the beneficiary entitled to income and the one entitled to capital according to principles laid down in equity law.
The method of accounting for an associated company. The main feature of the method is that the investment in the subsidiary is recorded in the balance sheet of holding company at a valuation which takes into account the profits or losses accrued by it and
Having a value depending on the level of the stock market. Some policies of life assurance are equity linked so that the amount realized when the policy matures depends on the level reached by share prices at that time.
A method of evaluating capital expenditure and research and development projects. Examines the rate of amortization of an investment calculated against the rate at which the investment itself is made.
Also known as human engineering. The study of the capabilities and limitations of human performance of mental and physical work undertaken in different environments. In the industrial field, ergonomics is concerned with the application of anatomical, phys
Abbr. of Exchange Rate Mechanism.
A clause contained in a contract, usually for major construction work, which permits the overall price payable to be increased above that originally agreed to allow for the increased costs of labour and material. Because inflation makes it very difficult
A legal document held in abeyance until some conditions have been satisfied or some time period has elapsed.
An investment trust formed by a consortium of banks to take an equity interest in businesses which might otherwise be required to close in order to settle the duties payable on the death of the owner.
Abbr. of Electronic Transfer of Funds.
A special form of cheque issued by a bank to its customers on request, which permits the account holder to draw cheques in European currencies.
Funds in USA currency held in accounts in Europe.
An artificial currency unit having a value determined by the weighted average of the values of the currencies of members of the European Community. Some expect that it will eventually form the day-to-day medium of exchange for transactions within Europe a
Abbr. Evaluating and Optimization. A systematic procedure for improving quality, wastes reduction and improved productivity. The procedure involves the introduction of a routine for small changes in the levels at which manufacturing process variables are
Looked at from before the event. A profit calculated ex ante would be one, which is calculated on the basis of the facts known or projected, at the beginning of the financial period to which it relates. It is a largely theoretical idea as in real life pro
Without capitalization rights. This term is attached to the price of a share quoted on the stock exchange to signify that a buyer will acquire the shares without the benefit of a recent rights or bonus issue.
The amount which an insured person will have to pay out of his or her own resources in the event of a claim under the policy. It will be deducted from the total amount of the loss in determining the amount paid by the insurer.
The finances of the government. Thus a reduction of taxation is said to bring a loss to the exchequer.
A note attached to the quotation of a price of a share indicating that it is purchased without the right to receive a recent dividend. This right remains with the seller. When share change hands at about the date of the payment of a dividend the question
The feminine equivalent of executor.
A type of company which was given statutory exemption from the obligation to file an annual return with the registrar of companies.
A value placed on an asset by reference to what could be obtained if it were realized. Realization might be immediate sale or by its progressive use in a revenue creating activity.
Amount of cash disbursement. Expenditure may be categorized as revenue expenditure or capital expenditure. Revenue expenditure is that incurred in current activities to purchase goods and services which are consumed immediately.
A value which was expired during the current accounting period. An expense may be represented by a cash payment, such as wages. Alternatively it may be calculated as a portion of the value of a fixed asset, i.e. depreciation, or as an amount written off a
That part of the deficit recognized by a pension fund on an actuarial valuation, which occurs because events have differed from the expectations, which formed the basis of the previous actuarial valuation.
Cost incurred in exploration, which had the hope of leading of exploitable deposits of oil or minerals. The accounting significance of such cost is that it will be recovered through production if successful but will be completely lost if not. Prudent acco
A form of insurance against loss occasioned by the default of overseas debtors. It is offered, against the payment of a premium, by a government department set up for the purpose. Its object is to encourage overseas business by minimizing one of the risks
A document issued for comment before its contents are finalized. The term is commonly applied to the exposure drafts issued by the accounting standards committee or accounting standards board. These are draft accounting standards.
Letters standing for Exchange Telegraph Company, an organization which supplies financial and commercial information.
Costs and benefits arising from business activities which are not directly felt by the business itself. Pollution caused by some manufacturing process imposes a cost on the community at large, which is not met by the manufacturer causing the pollution.
A specialized financial function whereby producers, wholesalers and retailers sell their accounts receivable to financial institutions, including factors and banks.
A market, which is not at a level determined by the genuine interplay of, supply and demand. A false market is either made so deliberately or it is caused by special circumstances.
Letters standing for Financial Accounting Standards Board.
Abbr. Functional Analysis System Technique.
The analysis of accounting or other clerical procedures to assess the suitability of converting to a computer operation. Similarly used for any systematic diagnostic analysis leading to the choice of equipment or other technological development.
Letters standing for Forecasting and Inventory Control System.
A debit balance representing past expenditure not giving rise to any real asset. E.g. preliminary expenses or discount on the issue of debentures.
An insurance which may be taken out by an employer in order to protect the business from the wrongdoing of an employee.
Imposing the obligations of a trust. A fiduciary relationship imposes legal as well as moral obligations.
The system of management information in which performance, progress or profits are recorded by plus/minus symbols against predetermined norms without recording detailed figures.
The rights which are attaching to a work of literature to be made into a film. In the case of a successful novel these rights might have great value.
A device whereby price movements on the stock exchange are categorized as indicative of the emergence of a new trend. It is usually applied by supposing that a movement of some significant percentage in one direction or another is likely to be continued i
A lease of an asset having the characteristic that substantially all of the risks and benefits of owning the asset pass to the lessee.
Companies are required to disclose their financial commitments in the annual report. An obligation to undertake substantial expenditure entered into at the date of a balance sheet but not yet having been incurred to become a liability
An association having codes of practice which govern the proper conduct of its members in their dealings with the public.
A technique, usually involving computer spreadsheets, whereby the behaviour of a business under different prospective sets of circumstances can be predicted. It can be useful tool to management in forecasting the financial implications of their decisions.
A draft financial reporting standard issued for constructive comment as part of the process of moving towards a definitive standard.
A statement of prescribed accounting treatment of specified matters issued by the accounting standards board. It is intended to be applied to all statements intended to give a true and fair view. The failure to observe a standard would be prima facie evid
An index of share prices based on the values of thirty quoted shares. It has now been largely outdated by more widely based indices but is of particular interest as it has been calculated daily for 50 years. It therefore provides the longest continuous re
An index of share prices. It is more broadly based than the older Financial Ordinary share Index and can therefore be regarded as more representative.
The lowest level of manager within an organization e.g. foreman.
An office of state held by the Prime Minister, who is thus Prime Minister and First Lord of the Treasury.
The delay which occurs following the implementation of tax or public spending plans and the observation of their effects within the economy.
A desirable characteristic of governmental spending and taxation policy, which leaves the decisions of individuals unaffected by the tax implications and governed by the same consideration as would have guided them in the absence of the policy.
A pension in which the benefit to be received is fixed independent of the contribution made to the fund. It usually then depends on a combination of terminal salary and length of service.
A visual aid consisting of a cloth-faced screen on which symbols, letters, etc. are placed to adhere by surface tension.
An attribute of some contracts of employment whereby the employee has some flexibility concerning hours of work within a prescribed framework.
1. The lowest level which a price reaches. 2. The trading area of a Stock Exchange. Since big bang very little trading has been done on the actual floor.
Also know as snapback timing. A work study method of timing work in which the hands of the stopwatch are returned to zero at the end of each element and are allowed to restart immediately, the time for the element being obtained directly.
Letters standing for Free on Board.
Popular name for the Financial Times-Stock Exchange Index.
A proprietary computer programming system using exponential smoothing.
The action taken by a lender of money against a mortgage when, on the default of the debtor, the property is sold in order to obtain payment of what is owed. Any surplus is payable to the original owner of the property. If the amount realized is inadequat
Accounting concerned with the detection and punishment of crime. An accountant tracing the effects of a fraud in order to determine the amounts involved and the persons responsible would be engaging in forensic accounting.
A service provided by a specialist bank whereby the bank will purchase foreign currency obligations at a discount on a without recourse basis. The effect is to remove the risk of non-payment from transactions with persons overseas.
Abbr. formula Translation. A computer autocode or algebraic language for representing engineering and scientific data to a computer in a mathematical type of notation; the scientific counterpart of Cobol.
A market which enables the purchaser to buy commodities or foreign currency for future delivery at a price which is determined currently. Its use is a protection against an adverse movement of prices although it also means forgoing the benefit of any favo
Shares occasionally issued by companies to those involved in the initial promotion of the business. They do not carry any dividend until dividends payable on ordinary shares reach a certain level. They are then entitled to the remainder of profits. Reward
1. A privilege arising from the granting of a right. 2. A license entitling the holder to market a product or service according to prearranged specifications and conditions. The franchisee normally pays an initial fee and thereafter a royalty. A franchis
An American term to describe a business organization which specializes in setting people up in business, providing advice on good retail practice and guidance on stocks, merchandising and display. The franchise house obtains either a percentage of the pro
Statements of recommended accounting practice in particular industries which have been developed by persons in those industries and then franked, i.e. approved, by the Accounting Standards committee.
A payment made to a creditor by an insolvent person or company with the intention that the creditor should be given an advantage over other creditors of equal rank. Such payments are illegal and may be recovered.
Abbr. of Financial Reporting Exposure Draft.
One who provides services to all comers and is not employed by one employer. Freelance earnings are taxed in income tax law.
Term signifying that a price quoted by the seller of goods includes all costs, including transport and other charges, incurred up to the time that the goods are loaded on to a ship for transport aboard.
A form of organization, recognized by law, which exists for its members to give mutual assistance. Friendly societies have certain tax privileges.
Letters standing for Financial Reporting Standard.
Abbr. of Financial Times-Stock Exchange Index. (‘Pronounced ‘footsie’)
Where one loan is replaced by another, which is having a different maturity date or rate of interest.
A pension scheme where the contributions are actuarially determined to provide a fund adequate to meet the obligations involved in paying the benefit.
The costs associated with holding a funeral for a deceased person. They are a first charge on the estate and will be paid out of the estate by the executor.
Assets which, although they may have been acquired at different times, are not distinguishable one from another. A company may hold several parcels of shares in another company bought at different times and at different prices. As one share has exactly th
A form of quality control chart by attributes in which the number of defects in the sample is plotted.
Letters standing of Computer-Assisted Audit Techniques.
The transfer of funds overseas by means of telephone messages which is done by bank, on the instruction of a customer.
To beg, usually by borrowing small amounts of money with no intention of repaying them.
A demand by a limited company to the holders of partly paid shares to pay a further installment towards the full nominal value.
That part of the nominal value of the issued share capital of a company which the company has required to be paid up.
An option, which gives the holder the right to buy securities at a specified future date at a price, agreed currently. The option will be taken up if at the specified date the market price of the security is above that embodied in the option.
Organized course of action, projected carefully to achieve predefined objectives.
An expert and dealer in foreign exchange.
The relationship between the budgeted number of working hours and the maximum possible number of working hours in a budget period.
A variance caused by the fact that volume of production achieved by a particular level of productive capacity has been different from that planned in the budget.
The deduction allowed in calculating taxable profits in respect of expenditure on fixed assets. Capital allowances thus take the place of depreciation in accounts prepared for tax purposes.
An increase in the market value of an asset, which is not, caused by any change to the asset itself.
A conceptual model for determining the value of real investment projects, taking into account the effect they will have on overall business risk. The model is based on the idea of risk aversion, which is that, for any given rate of return, management will
A budget concerned with the proposed capital expenditure on fixed assets and their financing.
The process of preparing a plan for the raising of capital funds and for their deployment. For an incorporated business, funds may be obtained from a wide variety of sources. Chiefs amongst these are issues of ordinary shares or preference shares and of l
A responsibility to undertake capital expenditure which has not yet become an actual liability. A Company is binding to disclose the capital commitments by way of a note together with any other financial commitments on the date of its balance sheet.
The non-recurrent set-up cost of a project. After capital cost has been incurred there will subsequently be recurring running costs.
Gross capital employed, i.e. summation of fixed and current assets. 1. Net capital employed, i.e. summation of fixed and current assets minus current liabilities. 2. Proprietor’s or shareholders’ net capital employed, i.e. paid-up share capital plus res
Equipment which has an extended life so that it is properly regarded as a fixed asset.
Expenditure on additional fixed assets which increases the capacity and efficiency of existing fixed assets. Capital expenditure is intended to give benefit in future in contrast to revenue expenditure, which falls within the current accounting period.
The mass withdrawal of funds by international investors from a country where the future course of its economy is doubtful.
A gain made by holding an asset during a period when its market value increases.
Also known as industrial products. A term that is applied to machines and equipment used in trade or industry, but excluding consumable tools such as files.
Securities designed to provide funds for a business. They may be issued on a wide variety of different terms.
It depends on current market rate of interest and on the degree of risk attaching to the income. A rate applied to the annual income produced by an asset in order to determine its capital value.
To treat expenditure as if it was for the purchase of a fixed asset. As a result of which, it will remain as an asset on the balance sheet until written off by a process of depreciation.
A person who derives a living by investing sums of money in enterprises managed by him or herself or by others.
A loss occasioned by the sale of an asset at an amount below its cost. Such a loss may be set off against a capital gain in computing any tax due.
A principle of accounting that states that a profit is the residual revenue of a period after the initial value of the capital of the business has been restored. It is thus necessary to be able to determine the value of that capital in order to calculate
The line on a graph plotting the risk against the return for investment opportunities provided by a market.
A restraint on the investment of capital funds other than that arising from their cost or the availability of investment opportunities. Capital rationing is an artificial constraint on the capital budgeting process and has the consequence that a sub-optim
A statutory capital reserve essential to be created when share capital of a company is purchased for cancellation or is redeemed out of profits. It is created by transfer from revenue reserve.
A process whereby the issued capital of a company is reduced. There are two circumstances in which this might take place. These are: 1. Where future operations of the company are expected to be on a reduced scale so that a smaller level of finance will b
That process under which a company amends its capital structure by changing the absolute and relative rights of the providers of its finance.
The notional rate at which the capital employed by a business flows through the profit earning cycle, which is calculated as, Capital Turnover = Turnover/Capital Employed
An amount of money paid which depends on a number of people.
Letters standing for Capital Asset Pricing Model.
The process whereby the government seeks to limit the expenditure of a local authority by restricting the grant it makes to that authority.
A simplified computer program for evaluating and controlling small projects using the critical path method of network analysis which is from Computer Analysis of Projects by Sneddon, Trusler and Nicholson.
Agreement by a group of firms to control prices in a given commodity.
A selection of facts, either fictitious or drawn from life, describing a technical or human relations situation, usually in an industrial or commercial setting, which is needed for teaching purposes.
1. The systematic organization of estimated receipts and disbursements for a specified period of time. 2. A forecast of current cash income and outgoing.
A business or product which produces a large positive cash flows.
A machine that will issue cash to the customers of a bank or building society when correctly activated, usually by the insertion of a card and the keying in of a personal identification.
1. To the accountant, cash flow describes the flow of cash required to finance the daily or weekly operating expenses and meet the daily or weekly financial obligations. 2. To the investment analyst, a statement showing the receipts and payments of cash
A statement to be produced annually by a company in association with its profit and loss account and balance sheet. It gives explanation to the changes held by business in the cash and cash equivalents between one balance sheet date and the next.
A legal term meaning literally ‘Let the buyer beware’. Its implication is that the legal responsibility for ensuring that a purchaser is fulfilled with goods lies with him or her and not with the seller.
Current Cost Accounting.
Consultative Committee of Accountancy Bodies.
A one-hundredth part of a dollar.
A one-hundredth part of a French franc.
Equipment used for centralized recording of machine performance for a number of machines.
Synonym for expected value.
The document is, like the birth certificate of the company. It is a certificate issued by the registrar of companies to the effect that, all legal formalities having been complied with, a company has come into being.
A member of the chartered association of certified accountancy.
A cheque which has been certified by the bank on which it has been drawn to the effect that it will be met without question. It is thus as safe as cash so far as the payee is concerned.
A holder of the main professional accountancy qualification in the USA.
The discontinuance of a business.
Letters standing for Capital Gains Tax.
The reporting relationships which results from delegating and redelegating authority and responsibility to successively lower levels within an organisation.
An officer of state second in rank only to the Prime Minister in U.K. The Chancellor is responsible for the financial aspects of the government’s policy. He is appointed by the Prime Minister.
A capital gain that is chargeable to capital gains tax.
A management style based on the authority accepted by members of an organization due to personal qualities-charisma-of the manager.
The art of science of estimating in advance, the future movement of share prices by a careful study of charts or graphs of past performance.
One who practices chartism.
A series of prepared questions designed to assist a process of analysis, assessment or review by drawing attention to specific aspects of a work situation or subject.
The deduction by the employer from the employee’s pay of contributions due to trade unions, and payment of these sums to the unions concerned.
A card, when presented by the holder at the time of making a payment by cheque will ensure that payment of the cheque is guaranteed by the bank providing the cheque book up to a specified amount.
A social security benefit paid to all families in which there are children.
The practice, by an adviser managing funds for another person, of buying and selling investments contained in the fund for the sole purpose of creating a dealing commission for him or herself. It is regarded as inappropriate.
Letters standing for Cost, Insurance and Freight.
Chartered Institute of Management Accountants.
Council for International Progress in Management.
A code of practice to be followed in the event of takeovers and mergers introduced with an intention that such activities are carried out in a fair and proper manner.
The action of taking back tax reliefs or allowances previously given. Claw back occurs when circumstances change so that entitlement to the relief ceases.
An account with the bank of the type more commonly described as a current account.
A bank, which is a member of the city banker’s clearing house. Therefore, it has direct access to the facility for clearing cheques drawn on members which that provides. Other banks may use the facility indirectly by an arrangement with a clearing bank.
An account maintained at a bank by a professional person such as a solicitor or an estate agent into which money held on behalf of clients is placed.
The time at which the stock exchange closes for business for the day.
It is a company controlled by fewer participators and directors. Shareholders, debentures holders, share option holders are included under participators and close relatives, and close relatives and family trustees are included as associates.
A place of work in which only members of a recognized trade union are accepted for employment.
The price at which a share or other security had arrived at the close of business of the stock exchange on a specified day.
It is one of the methods of converting amounts expressed in one currency into a different currency, for accounting purposes. In this method, conversion is made at the rate of exchange existing between the two currencies at the date on which the accounting
Abbr. Common Business Oriented Language. A type of computer language.
Acronym for Continuously Contemporary Accounting.
Comprehensive system of autocoding of company programmes.
It is an addition or appendix to an existing will. A codicil has the effect amending the will without the necessity of drawing up a completely new will. The testator must sign the codicil and two persons must witness the signature in exactly the same way
Abbr. Computerized Information System.
Secondary or supporting security for a loan.
The time taken from the granting of credit to a customer until payment has been received. Debtors may delay payment so that the actual collection period is longer than that intended. Therefore A useful overall measure of the effectiveness of credit contro
That process whereby more than one person agrees to act together.
Accounts making use of multiple columns in to display their information in a better form.
A letter supplied by an accountant to the directors of a company or to sponsors on the occasion of the issue of a prospectus.
A fund in which there are several independent interests but where these interests cannot be identified with specific assets of the fund because these are mixed.
Means of expressing information in a form, which is capable of activating a wide range of office machinery. The common language is based on media such as paper or magnetic tape and punched cards and may be adopted for integrated data processing.
Where two or more countries agree to form a customs union between themselves and a common external tariff against goods and commodities imported from other countries.
Term used in the USA for the equity of a company.
A comprehensive term for hypotheses underlying research devoted to the study of consultation and exchange of thought or data among persons associated in a given activity or setting.
An artificial person created by law and having a perpetual existence until liquidated by legal process.
An error in a double entry bookkeeping system which by being equal in amount but on the opposite side, conceals another error.
A comprehensive term for analytical methods of determining business objectives and policies through the medium of marketing intelligence assessments and/or operations research with particular reference to a firm’s relative market standing.
The costs imposed on a business by some legislative obligation.
A procedure undertaken by government or a local authority to require the owner of land to sell it when it is required for some public purpose such as the construction of road.
The use of a computer for the conduct of an audit. They are used when the enterprise which is the subject of the audit maintains its records on a computer.
A code used to represent the basic instructions that a computer has been built or programmed to execute.
An agreement whereby a number of persons acting in concert, purchase shares in a public company.
A group of companies often having nothing in common except their ultimate control. Much of big business is conducted through the medium of conglomerates.
Money paid by one person to another, often anonymously, because the payer has a troubled conscience following some improper or illegal failure to pay the money in the past.
A principle of accounting which requires that profits should be reported at the lowest of available figures and assets should be stated at the lowest of available valuations.
Final accounts prepared for a group of companies as if they were single company. e.g. in case of subsidiaries and holding companies, consolidated accounts must be prepared so as to give true and fair view.
An abbr. of consolidated stock, an irredeemable government security on which a fixed coupon rate of interest is paid.
An association between two or more organizations to carry on a joint activity which may or may not provide for the creation of a separate joint organization.
A form of accounting used where goods are supplied in valuable, returnable containers.
The process of deferring payment due in one stock exchange account to a later account. There is an interest charge made for this facility.
Liabilities shown as footnotes on balance sheet. These are the liabilities indefinite either as to amount or occurrence.
A form of accounting for inflation which values all assets on the balance sheet at their realizable values. It also involves the creation of an inflation reserve, which preserves the real value of the invested capital.
An entry in a double entry account representing the reversal or cancellation of an entry on the other side.
Goods which are illegally smuggled into a country from another country.
The action of signifying that a person does not wish to be part of an agreement where otherwise it will be assumed that he or she does. Employed persons, for example, may contract out of the state earnings related pension scheme, and save its cost, if the
A document evidencing an agreement to buy or sell securities. A stockbroker who buys shares for a client will issue a contract note indicating the name of the security, the amount of it bought and the total amount due, including the broker’s commission.
An account to which the total of a number of items posted to individual accounts is posted for control and checking purposes.
A cost which may be controlled by the action of some responsible individual. What is controllable will depend on the extent of the individual’s authority.
An underlying principle of accounting which is adopted by common usage and can be presumed even if not expressly stated.
Conversion cost plus the profit on the product. Sometimes termed added value.
A debenture which may be converted into equity at the option of the holder. The dates and terms of the conversion are established at the time of the issue of the security.
The document by which the transfer of the ownership of land and buildings is affected. Each conveyance of such property becomes part of the ‘deeds’ of the property, which trace its ownership history.
An informal term for the falsification of accounting records.
A period of time allowed after an agreement has been reached but before it becomes totally binding. It applies to contracts for the loan of funds or involving other long-term financial commitments so that the borrower or investor may give effect to second
The property right that exists in original works of art, literature, music, etc. Authors automatically own the copyright to anything they produce and this subsists for their lifetime and for 50 years (or sixty years in some countries) thereafter. Copying
To acquire control over the supply and thus the price of some commodity or security by purchasing all, or nearly all, of the available supply.
A tax on the profits of incorporated bodies. The tax is based on the profits of an accounting period.
Term applied to controls, which are sometimes placed on the banking system over the amount of credit, which it may offer to customers.
That part of the accounting function concerned with determining, analyzing, reporting and controlling the cost of a process, job, product or department.
A comparison between the cost of providing a service or activity and the value of effects resulting in financial social terms. The success of such an appraisal depends on the success of identifying as many effects as possible and the extent to which they
Also called as budget centre. Any unit such as division, department or a group of employees, in cost accounting to which costs are assigned or allocated.
A factor used in activity-based costing to determine the apportionment of costs. Thus the floor space occupied by each of a series of activities might be the cost driver for the apportionment of the rent of the building. Numbers of employees working on ea
A description signifying that the price of the goods concerned includes their safe delivery to the customer.
The amount (expressed as an annual percentage rate) which a business has to pay in order to attract and retain capital funds. The significance to a business of its cost of capital is that it has to ensure that all investments it makes yield a return, whic
The amount paid by a holding company for shares in its subsidiary company over and above the value they would command as an investment, in recognition of the particular benefit, which the company gains through control.
A contract under which the customer agrees to pay the cost of producing the supply with the addition of an agreed percentage as profit.
Inflation, i.e. rising prices, which seem to be primarily related to increases in the costs of business inputs.
The analysis of the response of cost and profit changes in volume. It requires, amongst other things, a distinction to be made between fixed cost and variable cost. The study of cost-volume-profit relationships is well exemplified in the construction of b
Having a common end. The term is used of businesses, which are members of the same group.
Fake. Counterfeit bank notes are a copy of the real thing. They have, of course, no value but it is possible that they may be used and may escape detection for some time.
A rate of interest stated on the face of a security.
A legally binding undertaking to pay money or to observe obligations. The purchaser of land e.g. may have to covenant that he or she will abstain from using it for specified purposes.
A term used by investment analysts of the earnings of limited companies, it indicates how many times greater is the total profit than the distributed profit.
A method of operational research for optimizing ordering policy for stock. Based on random sampling the object is to minimize capital tied up in stock and make quantitative estimates of the savings, which may accrue. The coverage of a stock item is define
Letters standing for Continuing Professional Education.
Letters standing for Current Purchasing Power.
1. Abbr. Card Random Access Memory. A type of computer store which provides access, rapidly, to computer data in either random or sequential order. 2. Abbr. Coordinated Rotational Area Maintenance. A method based on ‘stock piling’ non-emergency maintenan
An abrupt fall in prices. When all security prices are reduced by a substantial amount very quickly, it is called as ‘Stock Market Crash’.
Accounting which follows the literal rules of legislation and accounting standards but succeeds nevertheless in presenting an unduly favourable picture of a company’s position.
The set of procedures, which an organization uses to ensure that it does not give credit to its customers unwisely and that it collects, amounts due promptly. Credit control will thus include the establishment of a credit rating for those to whom it is pr
A strategy of rating customers and prospective customers in order of their credit-worthiness.
1. A type of network analysis planning technique, used to plan complicated projects cheaply. It shows diagrammatically the interrelations in sequence of all the activities in a project in such a way as to highlight, which are critical for the due performa
The sum of a number of figures written across the page rather than in vertical columns.
The rate of exchange between two currencies on the assumption that each is exchanged into a third currency. The market should assure that this is the same as the direct rate of exchange after allowing for transaction costs. If it is not there is an chance
A term attached to the quotation of the price of a share meaning that at that price it may be purchased inclusive of the right to receive a recent bonus issue of shares.
A term attached to the quotation of the price of a share meaning that at that price it may be purchased inclusive of the right to receive the benefit of a recent Rights Issue of shares.
A basis of valuation, which values an asset at the amount which it, would currently cost to obtain.
The method of accounting which bases valuations on the current replacement cost of assets. The operation of current cost accounting requires frequent revaluation of assets.
A reserve set up to contain the revaluation arising under current cost accounting. It may also be called a revaluation reserve. It should be regarded as undistributable and is therefore a capital reserve.
A file containing material of immediate and current relevance. The term is used by an auditor to describe the file containing papers relating specifically to the audit in hand.
The profit on the trading activities of the business after charging expenses at current cost. Current operating profit is one constituent of business income. Another is holding gain.
A procedure of accounting measurement which allows for the effect of inflation on the value of money. It is often abbreviated to CPP. Under CPP all historical cost values are translated into current equivalents by the use of an index which represents the
An accounting ratio (total current assets/total current liabilities). This measures the liquidity of a company and the ability to meet its short-term obligations, i.e. current debts.
Letters standing for Cost-Volume-Profit.
The science of control and communication in mechanical and biological systems.
Sales accounting method in which statements are prepared and dispatched throughout the accounting period. Customer’s accounts are arranged in a logical order, usually alphabetical, and divided into cycles.
A debit balance seeking an account against which it can be written off where such an account does not exist. e.g. a business makes a payment for goodwill, which it does not want, to record as such in the balance sheet. It seeks to write the amount off aga
A book of prime entry in which transactions of a specified type are recorded on a day to day basis.
A period of time following the expiry of an insurance policy in which the insurer will accept the payment of a premium for renewal. Once the days of grace, generally, 30 days, have expired the policy is void and the insurer will not be liable under any cl
A social security benefit paid to bereaved persons.
A duty which used to be charged on the property of a deceased person. It was replaced by estate duty, by capital transfer tax, and then by inheritance tax.
Any document containing an acknowledgement of indebtedness. Normally refers to a loan secured by a ‘floating charge’ on the assets. May also be a loan secured on specific assets or refer to an unsecured loan.
A reserve representing retentions out of profit made for the purpose of redeeming debentures.
A card similar in appearance to a credit card and which is offered in a similar way in payment for goods and services. The essential difference is that in the case of a debit card such payments are then debited to the holder’s bank account in exactly the
A service whereby the factor acquires the right to receive payment from the debtors of the business in due course by the making of an immediate cash payment. The factor is rewarded for these services by acquiring debts at a discount against the amount to
Total liabilities divided by total capital to show the weight of credit in a business.
Also known as diagnostic routine. To test a computer program or business system and to trace and eliminate errors and machine faults.
The procedure whereby a currency in which the units do not have a decimal relationship one to another is converted to one which does.
The study and application of mathematical techniques which provide a rational ground for choosing between alternative courses of action in situation of varying degrees of uncertainty.
A method that has been used to examine new product development, research and development strategy and plant modernization programmes. It is a method of displaying the anatomy of a business decision and the interplay between a present decision, chance even
The costs involved in taking a productive unit out of service.
Bonds issued at a price very substantially below their ultimate redemption value. A large part of the overall return to the holder is thus in the form of the difference between what is paid for the bond and the amount at which it is redeemed. There are sp
These are similar to deep discount bonds. Only the difference is that a deep gain security is one, which is redeemed at a large premium over its issue price.
The termination of an interest in property according to the terms of some deed.
A synonym for liquid assets.
Shares whose right to a dividend is postponed until after dividends of a prescribed amount have been paid to other shareholders. In spite of the postponement of dividend rights the amounts ultimately accruing to the holders of deferred shares may, if the
Taxation which, owing to the operation of tax legislation, is payable in a year later than that in, which the profit to which it relates, was recognized. This arises because of so called timing differences between accounts prepared for tax purposes and th
An amount receivable under a pension scheme which is laid down in advance. The contributions are then calculated so as to lead to this outcome.
An amount payable by contributors to a pension scheme, which is intended to the benefit ultimately received, depends on the amounts and timing of the payments.
An amount deposited with a bank, which may be withdrawn on demand, i.e. without having to give any notice.
A legal term implying that a matter is trivial and it is not appropriate to pursue it.
Abbr. for Decision Mapping via Optimum Networks. A procedure of choosing the best path through the network and obtaining best utilization of funds.
The value of plant and machinery acquired by a business is normally placed in a pool for the purposes of calculating capital allowances, so that there is no need to treat individual items separately. The taxpayer may elect that short-life plant and machin
The maximum amount which a business would be prepared to pay rather than lose a specified asset. The deprival value of an asset is thus a measure of its value to the business.
It is a technique used in group depth interviewing where respondents are asked which product they would miss most if it were no longer on sale.
A tax on gains made on the sale of land arising from its development potential.
A form of statement, which displays the difference between, figures arising from two alternative courses of action. Its aim is to highlight the benefit or otherwise of selecting the one rater than the other.
Payment made for the restoration to good repair of a building at the end of a lease under conditions imposed by the lease.
The process whereby the equity holders’ interest in a company is reduced by the creation of extra equity in different hands without a commensurate inflow of funds.
A method of analyzing manual methods or operations into the basic motions required to perform them, and the assignment of predetermined time standards.
Also known as law of variable proportions. An economic ‘law’ or concept which describes the decrease in total production when varying the quantity of one productive factor while holding the remaining factors constant. The law emphasizes that factors of pr
A synonym for marginal cost.
1. American term for variable costing. 2. Costs which can be identified with a particular activity or product.
An instruction given by the customer of a bank to the bank to allow charges to be made periodically to an account at the instance of some third party.
The amounts paid to the directors of a company, whether in their capacity as directors or otherwise. The total amounts must be shown in these published accounts of the company, distinguishing between amounts payable in the different capacities.
The process whereby figures which show the results of a combination of activities are analyzed so as to show the results of the separate components of the figures.
A factor used as a multiplier to convert a future cash flow to its present value. The factor, which is always less than 1, depends on the cost of capital and the length of time, which is to elapse before the cash flow takes place. The factor is calculated
Also known as industrial rate of return. A method of evaluating the earning power of capital expenditure projects by discounting the flow of anticipated annual earnings or income at a rate such that the accumulated present values of these payments will eq
That part of a person’s income over which they have genuine discretion because it is not already committed to regular payments such as mortgage repayments and household expenses.
The action of seizing goods under an order of a court. This is usually because there are amounts of money owed and the goods will be sold in order to raise this.
A notice issued by a court preventing a company from registering transfers of shares or other securities.
The disposal of sections of a business. This is done usually where a company finds that one of its divisions is carrying out activities not compatible with what it regards as its core business.
The number of times, over which a company’s dividend could have been paid out of the current year’s profit.
A Revenue Reserve which has been formed to provide a buffer between dividends and the profits supporting them. Thus in a good year amounts are transferred to this reserve over and above the dividends paid. In a poor year dividends can be maintained by sup
Synonym to Ex Div.
Synonym to Cum Div.
The dividend paid by a company expressed as a percentage of the market value of its shares. It is thus an expression of the actual rate of return in the form of cash, which the investor is receiving on the amount currently, committed to the investment.
Generally used to describe any card, form, tag or label and loosely applied to bin cards, stores, requisition forms, time cards, etc.
An amount which may sometimes be paid over and above the official rate of exchange in order to acquire dollars.
A company which does not engage in any transaction. Usually a company becomes dormant after a period of normal trading activity.
Sometimes used in psychological testing of fatigue and concentration. The person being tested has to mark with a dot, the centres of circles passed in front of him/her at a regular rate but in irregular positions.
A form of published account used in the nineteenth century. It was first introduced by legislation governing the operation of the railways.
A debt where circumstances have rendered its ultimate recovery uncertain. Conservatism requires that doubtful debts should be treated in the same way as bad debts. They should thus be recorded as an expense in the profit and loss account and to be credite
An index of share prices calculated for the US Stock Exchange.
A person in whose favour some other person, the drawer, makes out a cheque.
The person who writes out a cheque in favour of some other person, the drawee.
The state of having residence in two places. It has implications for taxation.
A method of analysing financial accounts so as to assess the underlying health of the business. It involves the calculation of certain ratios and their combination in a particular way, which, it is claimed, produces a useful single figure measure of perfo
A form of auction in which the price stated at the opening is progressively lowered until a bid is received and a sale concluded.
An operational research technique to facilitate the solution of sequential problems. It is a method of solving multi-stage problems in which the decisions at one stage become the conditions governing the succeeding stages.
Abbr. of Generally Accepted Accounting Principles.
A branch of mathematical analysis or operational research concerned with models of conflict between two or more contestants under specified rules. It involves the formulation of decision strategy and the aim of a game is assumed to be maximizing the retur
A term applied officially to some stock market securities, which are traded in rarely and in which there is a thin market.
A court order to a debtor that the debt is to be discharged to some person other than the original creditor.
The ‘normal’ distribution curve, which by experience has been found to portray approximately the distribution reflecting common experience in practice when natural and industrial phenomena with a large population are analyzed. Such a curve is symmetrical
The practice whereby the vendor of a property increases its price after an informal agreement but before formal contracts have been exchanged. Although clearly unfair the buyer has no redress because no contract for the sale of land is binding until it is
Abbr. Group Capacity Assessment.
The purchase of a business, usually by the existing management, financed to a substantial extent by borrowed money.
A partner in a limited partnership who has unlimited liability for the debts of the business. Every limited partnership must have at least one general partner.
A method of predetermined motion time study developed by the American MTM Association.
Abbr. of Graphical Evaluation and Review Technique.
A security which is guaranteed by the government. It is so called because default is out of the question. As an investment a gilt-edged security is very safe but this may be reflected in a rather unexciting performance.
A system of banking for dealing with simple transactions involving the transfer of funds from one person to another. The clearing banks for their own operations in this field have adopted it.
A share in a company which appears to have a dazzling future, often in some new field which is as yet entered. It is a characteristic of a glamour stock that its price will rise well above what is justified by any realistic expectations. This is likely to
The powerful banking interests in Zurich, Switzerland. The term became current during financial difficulties in the UK during the 1960s.
A term built into a person’s contract of service such that there would be substantial financial penalties in leaving that employment. The payment of a large bonus at the expiry of 5yrs. subject to continuous employment up to that date would be an example
A colloquial expression for compensation for loss of office.
A colloquial term referring to a situation where a person was induced to leave a previous employment in order to take up the present one by the payment of a large sum of money.
A system whereby a country’s currency is either in the form of gold or of notes against which gold is held by the central bank. The value of the currency then depends on the price of the metal.
A jargon for an index-linked National Savings Certificate. The term derives from the fact that, when first issued, these certificates were available only to persons of retirement age. They are now available to all. The real value of the certificate is mai
A technique for analyzing networks with stochastic and logic properties.
The value of the pound sterling as established for the purposes of the European common Agricultural Policy.
Term applied to semi-official dealings in shares conducted outside the normal trading hours of the stock exchange.
Trading profit before deduction of depreciation as a percentage of turnover.
The annual income derived from a security expressed as a percentage of the capital sum invested and before making any deduction for taxation.
A method of planning and controlling indirect payroll costs. Based on work measurement techniques, GCA applies work sampling, standard time data and other techniques in a comprehensive review of deployment of clerical, administrative and other indirect st
Shares in a company, which is expected to expand over a long period of time. The price of its shares should also, therefore, rise steadily over the long term.
A wage incentive scheme developed by F.A. Halsey in 1891 in the United States. It was the first incentive scheme to improve on the normal piecework system.
Term applied to a member of the stock exchange, i.e. a broker or a market maker, who has become unable to meet his or her obligations because of insolvency.
An index reflecting movements of share prices on the Hong Kong Stock Exchange.
The official transcript of proceedings in the House of Commons. It is the ultimate authority on what was said in the House.
A currency, like sterling, which is acceptable throughout the world. For a currency to be hard the economy of the country form which it emanates must be stable and managed in such a way as to inspire confidence.
Engaging in financial operations with the intention of reducing risk. For example, a person who had a forthcoming obligation, which had to be met in a foreign currency, may purchase it in advance as a hedge against an adversely affected rate of exchange.
A property which is subject to local taxation.
Full formal title of the collector of taxes.
Full formal title of the inspector of taxes.
An aid to decision-making which eliminates many alternative courses of action at the outset leaving only a few alternatives which need to be examined in order to find an optimal solution.
Abbr. of High Interest Bank Account, which are offered by number of banks.
The ascertainment and/or recording of costs after they have been incurred.
An amount to which a person terminating a contract of employment is entitled to receive in lieu of holiday not yet taken.
The functions of holding any attribute or condition steady against disturbance and external influences in a model or experimental situation.
A token payment made to a person who has voluntarily undertaken a service, which would normally command a fee. It is thus an expression of gratitude rather than a payment for the work done.
The expansion of a business by amalgamation or by constructing additional facilities to cover an increased volume of activity in a field in which the company is already engaged.
A rule whereby property disposed of by a deceased person during his or her lifetime must be taken into account in determining the entitlement of his or her heirs under the will.
The design and image used wherever a company’s name appears, e.g. on stationery, vans, advertisements, etc.
A financial representation of the value of the team of employees which a business possesses. Conventional accounting recording only the cash costs of employment, i.e. wages and salaries, training, etc. disregard human resources entirely. It has, however,
A type of finance which has some of the attributes of equity and some of the attributes of a loan. A convertible debenture is an example of hybrid finance.
A set of guidelines on current cost accounting.
The setting aside of a sum of money or identified goods for a specified purpose.
Abbr. of International Accounting Standard.
Letters standing for International Air Transport Association.
Integrated Data Processing.
Improving Management Performance. Systematic development programme for management training making use of the delegation of management responsibility coupled with direct efforts towards appropriately established performance targets.
Abbr. Integrated Management Planning and Control Technique. A network analysis technique.
Weights and other measures still used in the UK but which are gradually being replaced by the metric system.
A method of keeping petty cash by means of which a certain sum of money is retained for petty cash expenditure. At the end of the month or other period a cheque is drawn for the exact sum spent so that the imprest, i.e. the original amount, is replenished
Shares, which are held for the income, they will provide, i.e. there is no expectation that their capital value will grow.
A written agreement in the form of a deed. The term is commonly used for an agreement between a master and apprentice. The name dates from the ancient practice, not now usual, of writing two identical copies of the deed on one sheet of paper. They were th
A form of taxation whereby married women are taxed separately from their husbands.
A pure number, which represents the movement of some quantity, which is a mixture of many component movements, e.g. prices of shares on the Stock Exchange. The index is actually an average, sometimes appropriately weighted, standardized by relating it to
The process of linking a price or a value to an index.
Government body responsible for organizing trade fairs and exhibitions to promote the trading of industrial products of India.
Major qualifying body in the area of Management Science. In India, there are three IIM located one each at Ahmedabad, Bangalore and Calcutta.
A proposal made by a debtor in financial difficulty with his or her creditors. The object of the arrangement is that the debtor be permitted to manage his or her fairs with a view to the best advantage of all concerned.
A body set up to provide finance for industry. The finance comes from the Central Bank and the commercial banks.
A category of ordinary shares listed on the stock exchange. In practice, it contains the shares of those companies not fitting into any other specialized category and might, therefore, be accurately named ‘miscellaneous’.
A body formed to examine cases involving contract of employment. It may make awards, such as compensation in the case of the wrongful dismissal of an employee.
The process of seeking to sell goods by requiring that the prospective purchaser acts only if he or she does not wish to purchase.
Methods of accounting which seek to avoid the distortions existing with conventional accounting during periods of inflation. They include current purchasing power and current cost accounting.
A concept in management practice to denote the complex of social inter-relationships in habitually recurring patterns, collaborations or mutual assistance associations, arising from the combination or cooperation of persons within the framework of a given
A block of precious metal, such as silver, gold or platinum, made to a standardized weight. It is a convenient form in which to store bullion.
A form of capital allowance given for tax purposes in the year in which an asset is acquired. It will be at a rate determined by tax legislation and is calculated as a percentage of the cost of the asset.
A form of security where ownership is evidenced by entry in a register and no certificate of ownership are issued.
Trading on the stock market in shares by those wishing to take advantage of their inside knowledge of a company’s affairs. This might be done where there is advance knowledge of exceptional trading results or of a takeover offer. The rules of the stock ex
A type of interest bearing account offered by a Building Society or bank in which the depositor may withdraw the money without notice. The penalty for doing so is that interest is usually paid at a lower rate than on accounts for which notice of withdrawa
A security that provides a mechanism whereby a company can borrow money. Instruments are issued with a variety of different terms relating to rates of interest payable, redemption and convertibility.
The element necessary in any contract of insurance to distinguish it from a wager or bet and to render it legally enforceable. An insurable interest is an interest in the outcome of a contingency other than that arising under the contract of insurance. Th
A type of mathematical programming technique that can be applied to problems involving the allocation of resources in which it would be meaningless to speak in non-integer amounts, i.e. rounded-off values.
A method of accounting which integrates the costing and financial books into one system and avoids the problems of reconciling the financial and costing records.
A generic term to describe project and work planning, scheduling and control techniques.
An interest which will crystallize on the happening of some event such as the expiration of a lease.
An audit conducted part way through an accounting period. It has as its object either the greater effectiveness of the audit effort by a more immediate examination of transactions or the spreading of the total workload of the audit over a period. It does
An audit of a business carried out by employees of that business as opposed to independent outsiders. Most large companies have an internal audit department. An internal audit does not have the same independence or credibility of one conducted by independ
Some device built into a system of records, which by its operation, will reveal error. Double entry is an important form of internal check, as is a control account.
The set of accounting and other procedures which seek to ensure that financial dealings are honestly undertaken and properly recorded.
A document issued to campers and caravanners who are members of an accredited club. It gives third party liability insurance and may be produced to the proprietor of a camping site as evidence of the existence of this cover.
During life. Gifts made inter vivo may be taxed on the same basis as if they had passed at death where this occurs within a prescribed period after the gift.
An administrator deals with the estate of the deceased in the absence of a will under the laws of intestacy.
A method of management development training. Participants taking part in this method are presented with a typical cross-section of correspondence that is normally received by a manager and must make decisions on each item within a specified period of time
A value inherently parts of the object to which it relates. The intrinsic value of a business is a concept central to the practice of fundamental analysis. Most informed commentators hold the view, however, that there can be no such thing as an intrinsic
The process of evaluating an investment opportunity. It is an essential part of the process of capital budgeting. Some of the methods used for investment appraisal are payback, average rate of return, net present value and internal rate of return.
A grant given by the government to encourage a specified type of capital expenditure. Investment grants are given in furtherance of some government policy such as encouraging the development of new industry in an area of heavy unemployment.
An additional levy of income tax on income derived from investments.
A component of the amount which a country earns from its dealings with other countries. It arises from the export f services, such as insurance and financial services, as opposed to earnings from the sale of manufactured goods.
Abbr. of Institute office Management.
A job-grading scheme for clerical work devised by the Institute of Office management.
A written acknowledgement of a debt. It is usually regarded as an informal document providing a memorandum of the debt rather than intended as being available as evidence in a court. The letters are an abbreviation of the expression ‘I owe you’.
An institution concerned with the handling of share issues.
An association protecting the interests of issuing houses.
Synonym for market maker. The term jobber is now regarded as old-fashioned.
The listing of the content of a job by elements. Also known as task breakdown or operation breakdown.
An office, with many branches, operated by the government, which assists persons who are seeking jobs to find them.
A method of costing applicable to production made to customer’s specifications. All costs incurred are allocated to the job.
A requirement of the job that can be recognized, defined and assessed e.g. mental and physical demands, skill required, responsibility and working conditions. It provides a basis for selecting and training staff and establishing wage scales. Also known as
The establishment of a prescribed method of performing an operation or procedure.
A company whose capital is subscribed by applicants for shares. It will often by a limited company but may, rarely, be an unlimited company. A joint stock company is an example of an incorporated body.
A form of the joint ownership of property whereby in the event of the death of one of the joint owners the property passes automatically to the survivor.
Securities evidencing a loan which are worthless because of the poor credit status of the borrower.
Question of which trade union should have the right to organize a particular group of workers.
A scheme negotiated by the Kaiser Steel Corporation (USA) and the Steelworkers Union in 1963 to guarantee employees against loss of jobs or income caused by technological change. It also provides for sharing savings in materials and labour cost.
An amount payable by the lessee of a residential property to induce the landlord to accept him or her as tenant. It is usually payable outside the formal contract between the parties.
Also known as Key Results Analysis. Analysis of key task to be performed, levels of performance required and methods of checking actual against desired performance. Used chiefly in management and supervisory training though also in other training.
A term in training technology to describe sensations of movement in human muscles or joints deriving from response to receptor stimulation but not necessarily implying objectively perceptible movement.
A photographic record showing the actual movement path travelled by a limb or other members of the body in the performance of a given operation or activity.
A pool of money contributed by a number of people for the purpose of making payments for their joint benefit.
Term given to a agreement amongst motor insurers that, in the event of an accident involving parties having different insurers, each insurance company will meet the cost of the damage to its own client’s vehicle.
An American personality and selection testing system.
An enterprise which cannot survive without outside assistance.
A certificate issued by the land registry to the effect that the land specified has been registered with the registry.
A government office which has the function of registering the ownership of land. Not all land is registered but when it is, it makes easier its transfer on sale.
The process of passing funds through a number of transactions in order to conceal their origin. It is used for money acquired illegally.
In stock control or production planning, the actual or expected lapse of time between the initiation of an order or task and its completion. It is often longer than the delivery time.
Also known as switch selling. Attracting customers by advertising a product at low prices and then convincing them to purchase more expensive items.
The process of taking a lease on property which was previously sold by the lessee to the lessor. The object of this process is to release funds, which were previously tied up in fixed assets.
A proprietary name for a PERT type network planning system developed by IBM. Similar to PERT but with only one time estimates for each activity.
Also known as bookless accounting, slip system accounting and file posting. A method of accounting in which copies of invoices are sorted into ledger groups and group totals are posted to a control account. When payments are made the appropriate invoices
A service whereby persons on low incomes may get aid form the state towards paying for their costs when involved in legal action.
One who is in receipt of a legacy.
Abbr. Least Cost Estimating and Scheduling System.
A letter drawn up by an accountant for a client who’s accounting procedures has been reviewed. It sets out areas in which the system is weak or insecure and generally makes recommendations as to how matters might be improved
A situation arising where a public service is allowed funds equal to the amount received in the previous period. This means that it will not be able to expand or improve its activities.
The ratio of debt to proprietor’s capital.
A legal right to retain possession of another person’s property until a contractual obligation has been fulfilled. A lien applies only to property which is an element to the contract which it is sought to enforce. The accountant, for example, would not ha
A person who has the use of or income from, some property owned by a trust for the duration of his or her lifetime. After that it will pass to some other person.
A company the members of which have limited liability.
A widely used term to denote a pattern of delegated responsibilities comprising both executive and functional responsibilities.
Those, which have, direct responsibility for achieving the objectives of the company.
It is a Channel of delegated responsibility along which instructions flow and accountability is reported.
An amount incorporated into a contract as a penalty for non-performance, which represents a genuine pre-estimate of the amount of the damage, which would be caused by the breach.
The unit of currency in Italy.
A post occupied by a vicar in the Church of England.
An association of people offering insurance. It is organized in such a way that the risks and the premium income associated with them are spread over a large number of participators.
Abbr. Location of Office Bureau, a semi-official body in the United Kingdom for advising firms and institutions on the establishment of offices away from the Greater London Area.
A rate of interest used by banks amongst themselves. It is, however, related to general interest rates and underlies rates charged by the banks to customers.
Some defect in a set of rules which allows a practice not envisaged by those drafting the rules but which would not have been approved by them.
An expert employed by an insurance company to estimate the amount of its liability when a claim has been made. The loss adjuster will be required not only to determine the total value of the damage concerned but also to determine the extent to which it is
An article sold in the retail trade below cost in order to attract buyers for other merchandise.
An item in an auction sale. A lot may consist of a single object or a collection of objects, which have been grouped together for the sale.
A bell once belonging to a ship named the Lutine kept at Lloyd’s, the insures. It is traditionally sounded when news of a disaster is about to be announced.
The period of time between the end of the working week and the actual day that wages are paid. Also occasionally used as synonym for lead-time.
That branch of economics concerned with the study of aggregates in an economy, such as national income, Gross National Product, capital formation, etc.
A wealthy and influential businessperson.
Computer store using permanent magnetism for the representation of data.
A private house where a person lives for most of the time or which is regarded by the person as his or her main residence. Its significance is that any gain made by a person in disposing of the main residence is free from capital gains tax.
A collection of securities which is subject to active supervision in order to achieve defined objectives, e.g. maximum income or maximum capital growth. A unit trust is an example of a managed fund.
The analysis and presentation of financial and allied operating data which help management to carry out its planning, control and administration duties effectively. This involves the use of techniques such as costing, budgetary control, marginal costing,
The purchase by managerial employees of the business for which they work from their employing company. A management buyout most generally occurs when the business is under threat of closure and the existing management team believes that they can save it.
A loose term used to describe provision of information to management in which only significant deviations from budgets or plans are reviewed as the basis for corrective action. The object is to reduce the quantity of detail contained in management reports
Setting targets within an organization or part of it, as a basis for achieving greater efficiency and providing motivation and an incentive to managers. Factors impeding the attainment of objectives are identified and action taken to overcome them. Result
A written statement of the features of an executive or specialist position in an organization structure, giving first an outline of the main functions of accountability, followed by summaries of responsibilities and key results areas, with indication of m
A ‘total system’ type of data-processing system developed by IBM. It is designed to control the manufacturing cycle functions from raw material to finished product. The basic principle of MOS is management by exception.
A chart showing the relationship between the work of an operator and that of a single machine.
A method of evaluating capital expenditure and replacement projects developed by the Machinery and Allied Products Institute in USA in 1950. It aims at highlighting the future operating advantages of the project and the rate of return on capital.
That rate of tax, which a taxpayer pays on the highest portion of income. For many taxpayers the marginal rate will be the same as the standard rate. It will, however, be higher for a higher rate, which should be used in calculating the effect on net earn
The increase in revenue occasioned by a small increment in the volume of trade. It may not be the same as the current price because an overall reduction in price might need to be made in order to set the increment.
Stock level at which current orders cannot be met.
The unit of currency in Germany.
The total value of a company determined by multiplying the stock market price of its shares by the total number of shares in issue. Although frequently calculated and stated as a measure of the size of a company it is not necessarily a realistic estimate
A member of an organized market, such as the Stock Exchange, whose function is to buy what is offered and sell what is required at prices determined by the market maker. It is these prices, different for buying and selling in order to create a turn, which
A company’s share of the total sales of a product, usually expressed as a percentage of the whole, used either nationally or locally and sometimes even for a single specified outlet.
A mathematical term used in operational research and queuing theory to describe a series of conditions or states in which each depends on its forerunner, i.e. the probability of a particular outcome on the nth event is determined by the outcome of nth-I (
The difference between the buying or production costs and the selling price, i.e. the gross profit on an article.
An allowance against income given for the purposes of calculating income tax to a married couple. They are thus treated more favourably from a taxation point of view than if they were two single people.
To process accounting figures in such a way as to give a misleading impression short of actual false accounting. This may be done by the style of the presentation or by the adoption of discretionary accounting practices which give the desired result.
A catalogue of predetermined motion times for performing clerical work. There are thirteen categories of standard elements describing a variety of office activities, these are expressed in 1,00,000 time measurement units per hour.
A type of share transfer in which the person wishing to sell shares is matched directly against a person wishing to buy them through the offices of an intermediary. The intermediary does not, therefore, agree to buy and hold the shares as occurs in normal
A fundamental accounting principle, whereby, in computing profit, all costs are set off against the revenues to which they relate. Thus, profit is not the revenue of a period less the expense of the period.
The study of all aspects of the movements of materials with a view to reducing effort and maximizing efficiency. Includes the application of conveyors, forklift trucks, etc.
The assignment of specialist management service staff to decentralize locations. Such staff has dual responsibility, to the local management for day-to-day operation and functionally to their head office specialist.
The use of information about a person’s income and other resources to determine their entitlement to some benefit. Its purpose is to enable the benefit to go only to those who genuinely require it.
A system of payment of fixed rates of pay related to output by the setting of time standards, which are regularly reviewed. Time standards are set by normal work measurement methods are regular checks are made to ascertain how actual performance compares
A form of time lapse photography for filming method study. Activity is recorded by a cine camera adapted for low speed taking. Projection is then at the normal speed of 16 frames per second.
A statement taking the form of an account but which forms no part of the double entry system. Usually a memorandum account duplicates and explains further the data given in a ledger account.
A capital reserve appearing in the consolidated balance sheet for a group of companies arising where the value of the underlying assets acquired exceeds the value of the consideration given for them.
1. An American term coined by the Methods Engineering Council to describe a branch of industrial engineering concerned with method study. 2. The term is sometimes used in a sense synonymous with work-study and organization and methods.
Finance which is neither purely equity, i.e. shares, or loan finance but has some of the characteristics of each. Convertible debentures are an example of Mezzanine finance.
In work study the critical examination of a simo chart prepared by a frame-by-frame examination of a cine film of an activity or operation.
An imprecise term normally used to describe those responsible for the execution and interpretation of policies, and normally responsible for the operation of divisions or departments.
To take full advantage of a profitable situation often without regard to the interests of others.
The minimum rate of interest charged by the Central Bank for discounting first-class bills of exchange. No longer announced in public except in times of crisis when the Bank reserves the right to give a clear sign to the money markets.
The equity of shareholders in a subsidiary company as shown in the consolidated balance sheet. The minority interest represents the nominal capital and reserves attributes to the minority shareholders.
Letters standing for Mortgage Interest Relief at Source.
One who takes pleasure in the mere possession of cash but has no intention of putting it to any use.
A social term for a measure of average which is the most frequently occurring value in a population or sample.
Abbr. Modified Distribution. A simplified form of linear programming.
Less detailed accounts which small companies and medium sized companies are permitted under the Companies Act to file with the Registrar of Companies. Such companies must still present full accounts to their shareholders.
The capacity to design and manufacture parts on a coordinated dimensional scale so that they can be combined in the maximum number of ways. The basic concept is to have an inventory of parts that can be utilized in many different products.
One half. It might be applied to the division of a trust fund equally between two people.
A person scheme whereby the pension ultimately paid depends on the amount of money which has been saved by the member. This money is used to purchase a lifetime annuity.
An operational research technique which is a method of simulating a situation in mathematical terms and experimenting with a large number of random alternatives.
A colloquial term used to describe an employee holding two jobs, which are carried out, in parallel or in different parts of the day/week.
A method of listing and examining all the possible factors and combination of factors which may be useful in solving a given problem.
A moving average is obtained by removing the data from the first period from the first total and replacing this by the data from the next period. This new ‘moving’ average is then used again to derive an average. The two averages and all others that follo
Also known as group depreciation method. A method of depreciation in which two or more assets are recorded in one account. The same rate of depreciation is applied to all assets within a group regardless of actual age.
Term used to describe ‘participative’ management system developed by the McCormick Co. in USA in the 1930s. Includes setting up a junior board and profit sharing scheme.
Projects such that engagement in one automatically excludes engagement in another. In appraising the investment potential of mutually exclusive projects they should be ranked according to net present value to determine which are the better alternatives.
The decline in the amount of labour in a particular occupation resulting from retirement, death, and voluntary transference to other forms of employment.
Personal savings which have no explicit purpose except to add to the owner’s financial security. A person who has accumulated an amount of cash over a period of time might be said to have put together a nest egg.
A value attached to a share in a company based on the assets of the business attributable to the shareholders divided by the number of shares in issue. The balance sheet value of assets attributable to shareholders can be most simply determined by adding
A method of evaluating capital expenditure projects. All expenditure and income for a project are estimated and a discount is applied to bring the results to present value terms.
Generic term for techniques of planning complex projects logically by analyzing the component parts and recording them on a network diagram. This diagram represents all the activities and events to be accomplished in the form of a flow chart showing the s
An economic concept of probability in investment and cash decision-making. Suggests that a smaller quantity of certain cash will normally be preferred to cash represented by the possible outcome of investment risk taking.
Abbr. National Industrial Conference Board.
Abbr. 1900 Commercial Language. A proprietary simple computer programming language.
A facility provided by a bank whereby a trader can deposit cash in a safe accessible from the street after the bank’s trading hours. The trader will attend the branch the following day for the money deposited in the night safe to be retrieved, counted and
Abbr. National Institute of Industrial Psychology.
An index of share prices representing their movement on the Japanese Stock Exchange in Tokyo.
A now obsolete British coin, which was worth one-third of a pound.
A reduction in premium given to an insured person by an insurance company on condition that there have been no claims on the insurance in the previous period of cover. They are generally restricted to policies of motor insurance and reflect the fact that
A body which is not set up under the provisions of an Act of Parliament. As such its powers may be limited.
A term used by economists to signify that level of profit which is just sufficient to induce an entrepreneur to remain in business.
Securities issued by a company and evidencing a debt. The term is more commonly used in the USA than in the UK and Indian and generally refers to short-term loans.
A formal notice issued by an inspector of taxes to an income taxpayer receiving remuneration from employment. The notice states the individual’s tax code and the manner in which it has been calculated. The code depends upon the allowances against income,
The substitution in a contract of one debtor for another with the agreement of the creditor.
Abbr. of net present value.
The activity of collecting coins.
Letters standing for organization and Methods. 1.An advisory service for management specifically designed to assist in obtaining maximum efficiency and accuracy in organization and procedures. 2. The application of work study and other management techni
That clause in the memorandum of association of a company which sets out the objects for which the company has been formed.
Also known as ‘industrial psychology’. The study of psychological problems associated with work and arises in connection with, for example, vocational guidance, design of tests, personnel selection, training, and work-study.
A small number of shares in an unusual quantity. The sale of such an odd lot of shares may involve a higher commission than usual from a stockbroker.
An office operating under government auspices to which persons aggrieved by unfair practices in the retail trade may complain.
A body which exists to protect the interests of telephone users against government telecom, the main provider of the service.
A statistical term for a curve derived from an array of data or frequency distribution.
Friendly term for the Bank of England. It refers to the street in London in which the bank’s head office is situated.
A person who is appointed to see fair play and adjudicate in any dispute. A number of industries supplying consumers now have an ombudsman whose view is usually treated as binding even though it may not have legal force.
It is used most commonly in the USA, as synonym for overhead
Ratios calculated from a set of accounts, which throw light on the profit making activities for a period of time. Examples are the gross profit rate and the rate of administrative costs to sales.
An economic concept to describe the cost of a lost opportunity or alternative goods or services foregone or alternative opportunity for investment.
Abbr. of Operational Research Analogue Computing and Logistics equipment. A type of simple computer used for statistical forecasting and stock control.
Words attached to the price of an article offered for sale which implies that the vendor is willing to consider an offer below the stipulated price provided it is not too far below it. The term is normally used in the case of second-hand household goods,
Letters standing for Over the Counter Market.
Work done as part of a process of production by persons in their own homes. They are not usually employees of the business for which they work and are paid, often at very low rates, only for what they do.
The condition of having taken on greater financial commitments than can comfortably be managed.
A market in the shares of a specific company operated by a licensed dealer in securities. Although now it has largely disappeared it is used where the shares are quoted neither on the Stock Exchange nor on the unlisted securities market. Dealing on an ove
A fast worker sometimes used by management to set the pace for other worker in a factory, or to establish place work rates.
Also known as skids. Flat trays of varying sizes and design for holding materials or parts during movement to or in production and also for handling finished products. Forklift trucks often move them.
A profit arising from the change in market value of an asset which has yet to be realized.
Letters standing for Personality and Preference Inventory.
Running of a computer and former systems side by side during interim period before placing all work on the computer.
Equally in every respect. If a new issue of shares is made which is to rank pari passu with an existing issue this means that the rights of the two sets of shareholders will be indistinguishable in every way.
The action by a company of failing to pay a dividend at a time in the financial year when a dividend is usually paid. When the directors decide to pass a dividend it is usually taken to mean that the company is in difficulty. Either because its profit is
To pledge an asset with a pawnbroker as security for cash loan.
Pay As You Earn. The method of charging income tax to wage and salary earners. An employer is required by law to deduct the appropriate amount of tax from payments of wages and salaries before they are made. The employer then accounts for the amount deduc
A form of pension arrangement where the employer makes no advance provision for the payment of its pensioners but charges the amounts actually paid to its profit and loss account at the time they occur.
A final payment intended to terminate a contractual relationship. It is often applied to the final payment made to an employee who is leaving.
A document given to an employee to explain how his or her net payment of wages or salary is calculated. It will show the gross amount and the amounts of any deductions such as income tax and National Insurance.
Productivity Criteria Quotient.
That amount by which the population at large is expected to benefit from a reduction in governmental defence expenditure consequent on a more peaceful world. It is likely to be felt in the form of reduced taxation.
A review of some person’s activity by some other person involved in the same activity. A peer review of the work of a chartered Accountant would require an examination of that work by another auditor.
A price which is held constant.
Letters standing for Price-Earnings Ratio.
An amount deposited by a contractor against the possibility that the contract will not be completed. In that event the sum deposited will be used in meeting compensation.
An American term for fixed cost.
A difference between accounting profit and taxable profit which persists in the long run. It is to be contrasted with a timing deference. Both terms arise in connection with deferred taxation.
A file kept by the auditor by the auditor of a company to record information of permanent significance about the client. It might contain copies of the company’s Memorandum and Articles of Association and of the names and addresses of its directors.
An investment plan undertaken by an individual with an approved plan manager such as a bank. This type of plan was created by statute and has the characteristic that provided the rules are observed all income and capital gains accruing to the plan are fre
It is normally operated by an insurance company and would be used by a person whose occupation does not automatically provide a pension. It is a scheme whereby an individual can save money to purchase a pension on retirement.
The term is often applied in describing such property forming part of the estate of a deceased person. Property consisting of cash, goods, furniture and other movable property
Abbr. of Programme Evaluation and Review Technique. An integrated network analysis and control technique for aiding management in studying and controlling engineering, design, research, development or manufacturing projects by critical path scheduling; ma
A process whereby the assets of a business in liquidation are distributed to the proprietors as and when they are realized. Piecemeal distribution is usually encountered in the case of partnership.
That part of stock, which is lost, because items have been stolen. The term usually applies to small but repeated acts of theft often by employees. The perpetrators often do not see their action as reprehensible as the stock is usually small in amount and
A method of testing new procedures by processing a representative sample of data from the operations which are to be covered by the new system, either by sampling historical data or taking a sample from current operations.
An application form for shares in a company, printed on pink paper and giving the person using it a right to preferential treatment when allotments are made.
A method of obtaining a subscription for shares in a company. The shares are not offered publicly but are issued to persons or institutions that have previously agreed to take them.
Term applied to any form of credit card, charge card or debit card.
To allow profits to accumulate in a business rather than to be withdrawn by the proprietors so that the extra resources thus made available can be used in financing the expansion of the business.
A type of insurance taken out by the organizers of an event to protect themselves from the risk that its financial success will be affected by adverse weather conditions.
A synonym for merger.
Amounts received by a business after it has permanently finished trading. Their significance is that they will be subject to income tax either as received or as an addition to the profit of the business in its last year of trading.
Systematic approach, involving ten stages, to evaluate investment proposals. Analyzes costs involved and expected return on investment i.e. annual net income.
The fee charged by the Post Office when it issues a postal order. It is paid in the form of an addition to the price of the postal order.
The situation where an unemployed person in receipt of social security benefits cannot take up employment without finding his or her net income reduced because of the consequent loss in benefits.
A revenue reserve of a subsidiary company, which came into being before the holding company, acquired control. Under the acquisition method of constructing a consolidated balance sheet a preacquisition reserve is unavailable for distribution to the member
A company seeking to take over another company whose existing management does not support the takeover.
An American personality and selection testing system.
It was established in the mid 1970s and is the first such service in the world. A network of computers accessed by telephone and operated by British Telecom. Subscribers obtain access to a large amount of regularly updated information on financial and oth
A premium bonus system of wage payment, first used by Priestman’s of Hull in 1917, applicable to employees who work in groups, a group bonus being paid in addition to the ordinary time rate.
The aggregates of direct material cost, direct wages and direct expenses.
An ancient legal principle which gave priority of inheritance to an eldest son. It has been abolished in 1925.
All types of debentures, preference shares and other stock ranking for payment of interest or dividend in precedence to the ordinary shares.
An adjustment contained in a set of accounts, which relates wholly to a matter, which occurred in a previous period. It will normally arise because some error in an earlier year’s accounts has been discovered, or because there has been a change in account
The authority given to a person to deal with the estate of a deceased person according to a will. Probate is not granted until certain declarations have been made and duties have been paid.
Use to obtain further information when the initial inquiry does not produce a satisfactory response, or to make sure at interview that the respondent has answered the question fully.
A technique for determining the unit cost of the output of a continuous industrial process. The special problem connected with process costing is that of the valuation of work in progress.
The composite variety of goods produced or marked by a producer or sold by a wholesale or retail organization.
A method of calculating depreciation in which the amount charged to the profit and loss account in the year is proportionate to the amount of product turned out by the asset. The method is based on the idea that the productive life of an asset will expire
Any unit in cost accounting to which profits are assigned or allocated.
The making of an unfair or disproportionately large profit by exploiting a situation. Profiteering might occur, for example, if traders put up prices excessively for a product which is in short supply but has not, in fact, cost them any more to buy than u
The action of investors following a rise in the value of shares whereby they sell shares in order to realise their profit. Such actions by a sufficient number of investors may halve or reverse the rise in price and helps to explain why long uninterrupted
A person employed by a firm to keep track of work in progress through its various stages to ensure that production continues smoothly.
A coin produced to exceptionally high standards of workmanship with the intention that it should be held by a collector rather than be put into circulation.
The formal establishment of the right of a creditor to participate in payments out of the estate of a bankrupt person. It will be achieved by the presentation of documents to the court.
In proportion to. Thus an offer of shares by a company to its existing shareholders, a rights issue, will be made pro rata with the size of their existing holdings.
A policy of government, which has the effect of giving competitive advantage to home industry by imposing duties on goods, imported into the country.
A principle of accounting to the effect that accounting statements should be prepared on a cautious basis, avoiding undue optimism. It has been said that the purpose of a balance sheet is to ‘show that the financial condition of the company is at least as
Damages awarded of an amount exceeding any actual damage suffered by the plaintiff with the intention that the defendant should suffer some element of punishment for the conduct, which is complained of.
A document requiring the authorizing a purchase by a business. It is an important part of stock control. It ensures that goods are not bought which are not required for some proper purpose.
An amount written off the value of the investment in a subsidiary company in the books of the holding company logically required when goodwill arising on consolidation is written off against reserves in the consolidated balance sheet. The acknowledgement
An option giving the holder the right to sell a security at some future date at a price agreed at the present. A put option may be used by an investor wishing to limit the possibility of loss through investing in a risky security.
A method of financial analysis using ratios whereby, starting with an overall measure of profitability, the causes are quantified systematically thus permitting inter-and intra-firm comparisons.
The relationship of the market value of physical capital, such as existing plant and equipment or other corporate assets, to its replacement cost. When the Q ratio is low, corporations tend to acquire existing assets rather than build new plants or equipm
Research in which answers to questions are processed to produce numbers or percentage of people in different categories, according to the make-up of the sample and structure of the questionnaire, giving particular answer.
The consequence of a transaction where one party, the lender, makes a payment on behalf of another, the borrower with the agreement that the borrower will ultimately repay the lender.
A relief given against inheritance tax where a person inheriting money then dies within 5 yrs. So that the same sum becomes liable to tax for a second time.
Something done in exchange for another thing done or given. Thus an employee might agree to work late, the quid pro quo being that he or she is allowed to leave early on another occasion.
A form of sampling used in market research, in which the initiative is left with the interviewer to locate a set number of individuals who have been specified by age, income level or other chosen characteristics. This method can apply to calling outlets a
A company whose shares are quoted on the stock exchange. Most large companies are quoted companies. Their shares are, as a consequence, readily realizable.
The rent which a property would command in a free market
A draw for prizes usually organized to raise funds for some charitable purpose.
A proportion of the proceeds of some activity received by one who has contributed to it in some way. The term is used colloquially to mean a payment in the form of a commission.
The theory that stock market prices follow a random path and that, therefore, their future course is not predictable. The random walk theory arises from the efficient market theory of stock market behaviour.
An extension of activity sampling in which a rating is applied to each work element so that the work content may be established in addition to the proportion of time occupied by activities or delays.
Term used in assessing the effectiveness of advertising in the press. Respondents are asked to indicate whether, if they noted an advertisement, they then ‘read most’ of its copy. This data can then be expressed as a percentage of total readerships.
Investments in physically productive assets such as plant and machinery as opposed to investment in securities.
A fundamental accounting concept which states that profits should be recognized only when they have been realized or when realization is assured.
A profit calculated after taking into account of effects on the figures of Inflation.
A method of testing the impact of advertising by ascertaining if it is remembered.
A condition of the economy of a country under which business is conducted at a reduced level. It is also characterized by unemployment and falling prices.
The inclusion of revenue in the profit and loss account. Revenue may be recognized when a contract of sale is made or, alternatively, when the cash has actually been received. It is regarded as bad practice to recognize revenue before either it has been r
The right to require payment from a person other than the one having a primary liability. If, for example, the drawee of a Bill of Exchange fails to honour it on maturity the holder may have recourse to other persons who have endorsed the bill since it wa
The color in which negative figures are traditionally recorded. Thus to be ‘in the red’ at the bank is to have a bank overdraft. For a business to ‘go into the red’ is for it to make a loss.
A colloquial expression for official routines or procedures especially those which are needless or excessively complicated.
A payment made to an employee who has been dismissed by reason of redundancy. There is a statutory entitlement of redundancy pay for all employees, the amount depending on length of service and level of pay.
Grants given by the government to induce companies to start businesses in regions of the country which are economically depressed.
The register of charges is one of the statutory books of a company. A register to be kept by a company recording all charges against any of its assets. These charges arise in connection with the use of assets as security against a loan.
A mathematical method used to establish the relationship, if any, between observed and quantifiable variables.
A tax which bears more strongly on those with low incomes than those with higher incomes. An example of a regressive tax would be a purchase tax on the basic necessities of life. These form a bigger proportion of the expenditure of persons on low incomes.
A body set up under the terms of an Act of Parliament or voluntarily to achieve the regulation of some industry or activity.
The process whereby an insurer transfers some of the risks which have been accepted to another insurer. It is a mechanism whereby insurers can maintain a balanced portfolio of risks.
The delivered price for imported goods, that is, including all freight, tariff, insurance and other shipping charges.
A quantity set with the intention that when stocks fall to that level the procedure for reordering will be set in motion. The purpose behind setting such quantity is to ensure that enough stock remains to cover requirements between the ordering and the de
The amount of profit shown by the profit and loss account of a business. The amount depends in part on the bases of accounting which have been used in preparing the account.
The currency in which final accounts are expressed. They may originally have been prepared in some other currency which has subsequently been translated such as in the case of a UK company having foreign subsidiaries.
The activities involved in document reproduction, including photography, photocopying, plate making, etc.
The practice in which the manufacturer fixes the minimum price at which the goods are to be sold to ultimate user or consumer and imposes sanctions on price-cutting.
A condition attached to the supply of goods that title in them would not pass from the seller to the buyer until payment has been made in full. Normally a creditor for goods supplied would rank below many prior interests in the event of the bankruptcy of
That part of the nominal of a business that has not yet been called up. It is thus a reserve, which can be drawn on in case of need.
A network planning method that makes the most efficient use of manpower, materials and cash resources among several projects going on simultaneously.
Banking services provided to individual members of the public as opposed to those provided to businesses and institutions.
An index, which measures the general level of retail prices. It is calculated and published monthly under government auspices. Its importance is as a measure of inflation and as a yardstick against which index-linked investments and pensions are adjusted.
Expenditure of cash which are undertaken to maintain asset values or to obtain current revenue.
A situation where a company which was threatened by takeover responds by taking over the prospective bidder.
The return of property which was the subject of a lease to the freeholder at the expiration of the lease.
The facility to borrow money up to a certain specified amount and to replace one borrowing with another as the former is paid off so long as the overall limit is not exceeded.
The flow process from raw material source to final consumer. The concept embraces the basics functions of producing and marketing as an integrated system and includes the selection of the most effective combination of transporting, processing, handling an
Acting in a market in such a way that the prices established bear no relation to those, which would have been produced by a free interplay of supply and demand. This might be performed by large buying or selling or by supplying false information to the ma
Term used to describe the relationship between yield on investment and the degree of risk. A low yield is usually associated with low risk and uncertainty is associated with high yield.
Abbr. Return on Assets Managed. An alternative term for return on investment or capital specifically designed to focus attention on the investment in stock and debtors when evaluating new marketing proposals. ROAM is intended to show that these current as
Letters standing for Return on Capital Employed. Profit related to the investment of capital required to produce it. It is used as a measure of performance but is subject to distortion due to difficulties in determining both profit and capital employed.
Abbr. of Re-Ordering Level.
A budget which, having been established at the beginning of a period, is then constantly amended on account of developing circumstances. The main advantage of a rolling budget is that it should prevent a variance arising from external and uncontrollable c
A postponement of capital gains tax given to a business which reinvests the proceeds of the sale of an asset on which a gain is made. Without rollover relief businesses would have a powerful disincentive to replacing such assets.
Letters standing for Re-ordering Quantity.
A group incentive scheme in which all hourly employees are eligible. Precise productivity increases are measured monthly and these gains are shared between employer and employees.
Any of several illegal tactics used by workers during labour disputes, such as willfully damaging machinery or other property of the employer, wasting or destroying materials, and obstructing or interfering with normal business operations.
The relationship between the number of prospective customers in a territory and the number that can be effectively called upon by the salesman at an optimum call frequency.
The proportion of total sales which each of the range of products bears to the whole. The significance of the sales mix is that some products are likely to produce a larger gross profit than others are. The overall gross profit rate will, therefore, depen
Adopting a policy of achieving satisfactory results without necessarily achieving the best which might be possible. Such a course of action is recognition that a policy of optimization is very difficult to operate and involves special costs and risks of i
Letters standing for Save As You Earn.
A group incentive scheme whereby employees and employers agree to a standard labor cost on a per unit basis. Any savings from reductions in costs are then shared equally between the workers and the company.
An agreement between a company and its creditors which will allow an insolvent business to continue. It will be made where creditors are convinced that their interests are likely to be better served by a continuance of the business than by a closure.
A German Production planning and control system involving the use of specialized wall chart and directs telephone communication between factory operators and production control staff.
A dividend given in the form of extra shares instead of cash. It thus represents a capitalization of part of the profit and loss account. A scrip dividend is often offered as an alternative to cash at the option of individual shareholders. For them it has
The activity of collecting share and stock certificates for their inherent interest or attractiveness rather than out of any concern for their underlying investment value. The subjects of collections are usually certificates issued by dead companies.
Abbr. of Selective Dissemination of Information. Dissemination of information to meet the specific individual needs of research and development staff.
Letters standing for Stock Exchange Automated Quotations.
An issue of preference shares, which stand for dividend after a pre-existing issue of preference shares. They may well command a higher maximum rate of dividend in order to compensate for the slightly higher risk.
An official body having the responsibility of overseeing the operation of the New York Stock Exchange.
An official body in the UK having responsibility for the orderly and fair running of the financial services industry.
Cover of brochure or other print item made of same paper as inside pages.
Costs that remain fixed up to a certain point in production. Once this point has been reached the costs become variable as production increases.
An analysis of the components of a budget with a view of discovering which of the forecasts on which it is based is most critical. Sensitivity analysis is a part of the assessment of overall risk.
Training in collaboration and creative teamwork with other people. Training in small groups with the objective of increasing people’s ‘sensitivity’ to choices confronting groups and individuals and to attempt to encourage effective understanding.
The process of seizing the funds of a particular organization or individual. It is done under an order of and powers given by a court of law
Abbr. of State Earnings Related Pension Scheme.
An organization offering computer or data-processing facilities on a time hire basis.
The payment of interest on loans and dividends on shares. Such payments are required to be identified on a cash flow statement.
Time required for preparing a machine (or process) for production. Also known as make-ready time.
The opportunity cost of using an item of stock or other asset.
That which remains of company’s value after all prior claims against its assets has been met. The balance sheet value of shareholders’ equity is the total value of share capital and reserves.
A pre-decimalization unit of currency in the UK. Twenty shillings made up one pound.
One who has attached his or her signature to a document.
The influence by a company over the activities of another company which thereby falls to be treated as an associated company. It is defined as being participation in the financial and operating policies of the company without necessarily having full contr
A system of linear programming that makes solutions possible in algebraic equations where there are more unknowns than equations.
A salaried position where the work required is very little in relation to the remuneration received.
A state of the economy of a country in which economic activity is at a very low level. It is characterized by high unemployment and, usually, falling prices.
A fund of money held in an organization for which the person administering it are not made fully accountable, i.e. they have informal discretion over its use.
A forerunner of the European Monetary System in which the rate of exchange between the major European currencies and the US dollar were controlled within fairly tight bands.
The equivalent, in France, of the joint stock company in the UK.
A classification for consumers used in market research in which social status, occupation and income of the head of the household are taken into consideration.
A currency associated with an ailing economy, whose value and convertibility into other currencies is unreliable.
The placing of an advertisement in the news or editorial section of a publication – away from other advertisement.
Letters standing for Statement of Recommended Practice.
A gold coin of ancient origin which was having a face value of 1 pound.
Number of subordinates one manager has under his jurisdiction.
The situation relating to the shares of a company which make it likely that its share price will move differently from the market as a whole. Investors seek special situations with a view to making a profit from them.
A dual issue of shares having different rights issued by some investment trusts. One type of share, for example, might be entitled to any income earned by the fund and other entitled to any capital appreciation.
A device whereby, under current cost accounting, depreciation is split between that attributable to the original cost of the asset, which is charged to the profit and loss account, and that which is attributable to the increase in valuation, which is char
The rate of exchange between one currency and another which applies at the present time. It is to be contrasted with the rate, which would be quoted for future delivery of the currency, which is the forward rate.
A transaction for immediate completion at the spot rate.
The difference between the price offered for a share by a market maker and the price asked for it. The amount of the spread will vary according to the activity and volatility of the market.
Letters standing for Statement of Standard Accounting Practice.
One who subscribes for a new issue of shares with the aim of selling any allotment immediately as opposed to holding it as an investment. Stags are sometimes regarded as a nuisance.
A deposit or investment in a particular situation.
An instruction to a bank by a customer to make a fixed payment regularly on stated dates to some third party. The regular payments may be monthly or annually or at any other convenient interval.
The application of mathematical, statistical and probability techniques in order to establish and control limits of deviation from standard.
A matter, usually a debt, which can no longer be the subject of legal action because the time limit decreed by the statute of limitations, has been exceeded.
Silver of a defined standard of purity. It will bear a hallmark as a guarantee of this.
Refers to randomness in operational research and model making. Stochastic models are concerned with chance and incorporate probabilities of events happening.
An agreement, which entitles but does not require the holder to purchase a certain number of shares at a stated price during specified time periods. It is thus a form of option.
The process of deciding on the objectives of an organization, the use and application of resources, and the policies to achieve these ends.
In market research, a sample in which the proportions in each stratum are identical to the proportions in each stratum of the whole.
A charge superimposed on the added to some other charge in recognition of some special circumstance. A person paying for the carriage of goods e.g. may be surcharged if they are badly packed or if they have to be delivered to an address outside the mainla
A form of taxation, now abolished, under which persons having a high income were, required to pay a special supplementary income tax over and above the normal rates.
Exchanging a loan contract with a fixed rate of interest for one with a variable rate. The intention is to profit from forecasts of the movement of interest rates.
The alliance of resources between two or more independent firms designed to improve the marketing potential of both partners. Examples are licensing agreements, franchising, joint production promotions, setting up joint sales organizations, etc.
A group of companies working together on a project with an agreement as to how costs and profits should be shared.
The integration of individuals into a group for stating and solving problems. A structured approach to creative thinking.
A colloquial expression for operational time standards made up out of elements of operations previously measured.