Indirect costs

Costs which cannot be allocated directly to a named product.

Investment

Commitment of resources to a particular project.

Leasing

A contract in which the owner of an asset (the lessor) agrees to hire that asset for a sum of money to another person or organization (the lessee). The lessor retains ownership but not use of the asset.

Liquid assets

Assets which can be converted into money without loss of value.

Management buy-out

A situation in which the existing management of a subsidiary buy it from the parent company. When the majority of the required capital is provided by external loans it is called a leveraged management buy-out.

Margin of error

The difference between the actual output of a business and its break-even output.

Marginal costing

A costing method in which fixed costs are separated and the other costs (the marginal costs) are apportioned to products.

Overtrading

When a business has expanded in such a way that it lacks sufficient working capital and so suffers liquidity problems.

Payback

A method of investment appraisal which calculates the number of years it will take for the revenue of an investment to cover the original cost.

Preference shares

Part of the capital structure of a company. Holders are paid after debenture holders but before ordinary shareholders. The rights of preference shareholders vary from company to company and are laid down in the articles of association.

Pricing

The marketing function that decides on the appropriate price for a given product.

Profit and loss account

Accounting statement showing the profit a business has made over a given period of time and the way it has been used.

Purchasing

The business function concerned with the buying of raw materials and components.

Reserves

That part of owners’ capital which derives from undistributed profits. It is an item on the balance sheet of a company.

Revenue

The money received by a business from the sale of goods and services produced.

Rights issue

An issue of new shares offered by a company to existing shareholders according to their existing holdings.

Shareholders’ funds

The money raised from the issue of share capital and retained profits.

Stock exchange

Central market for the trading in shares of public limited companies that have been accepted for listing.

Straight line depreciation

A method of asset valuation that accounts for the eventual obsolescence of a fixed asset by reducing its value by a fixed amount each year.

Working capital

Current assets minus current liabilities.

1 Summary is a short account of something that gives only the most important information and not all the details. A summary should generally be no more than one-fifth the length of the original. A summary of a report, speech, or academic paper is also called an abstract.

2For advanced students

3Для студентів з більш низьким рівнем мовної підготовки дозволяється вилучити тексти 5, 8, 9, 10.

4Для студентів збільш низьким рівнем мовної підготовки дозволяється вилучити тексти 14, 15, 16, 17, 18, 22, 27.

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