The value that is written on the face of a financial instrument. The face value of a share (also known as the nominal value, the value at which it was issued) need bear no relation to its market value.
A service made available to customers or employees to use as and when they please. Hence an overdraft facility is a bank overdraft made available to customers to use whenever they need it. A canteen facility is a place serving food for employees to take advantage of as they wish.
Originally, an agent sent from Europe by the East India Company to run its trading posts in far-flung parts of the British Empire. Today a factor is any agent who is buying and selling something on commission.
A service in which a factoring house or other financial institution purchases a customer's accounts receivables and assumes all the credit risk of the customer's debtors and the responsibility of collection payments.
Factors of Production:
The essential elements – land, labour and capital – required for any wealth-creating process.
Originally, a trading post that was run by a factor. Subsequently, any site where factors of production are used in the manufacture of goods.
An alternative plan of action devised in case a primary plan fails.
A company owned and run largely by the members of one or two families. Such firms have special characteristics and special problems, such as how to motivate non-family employees when the most senior positions in the company are probably closed to them.
A foundation (see Foundation below), used to designate heirs, establish the rules and limitations, administer assets after the death of a founder, guarantee administration when heirs are indapable of doing so, avoid the waste of assets by irresponsible heirs, and to eliminate any formal arrangements between the assets of the foundation and the founder during his or her life.
Family Holding Trust:
A trust specifically created and managed to hold a family's assets consisting or real and/or personal property and/or investment portfolios. Such trusts usually own underlying companies to hold assets thus limiting the associated risk to the individual assets.
Family Limited Partnership (FLP):
A limited partnership created for family estate planning and some asset protection. It is family controlled by the general partners. A hightly appreciated asset is transferred into the FLP to achieve a capital gains tax reduction. Usually, the parents are the general partners holding a 1 or 2 percent interest. The other family members are the limited partners holding the balance of the interest in the partnership.
There are two meanings:
America's Financial Action Task Force on money laundering set up in 1989. See also
- A separate career path in an organization designed to cater for particularly able people who might not be prepared to wait and make the standard ascent of the corporate ladder.
- A procedure in the United States which allows for the fast passage of legislation concerning trade agreements.
A facsimile machine, a machine that makes paperbased copies of messages that have been transmitted electronically via telephone lines and computer networks.
F. B. I.:
The Federal Bureau of Investigation (U. S. A.).
Federal Deposit Insurance Corporation: a U.S. government-sponsored corporation that insures accounts in national banks and other qualified institutions.
A paper-based analysis of the likelihood that a project will meet its planned targets.
Federal Reserve, the US Central Banking system, established in 1913 and responsible for managing the US Dollar, both within and outside the US:
A payment for the provision of professional services; for example, the lawyer's fee and the accountant's fee. Other service providers, such as window cleaners and bus conductors, are not paid fees. They are paid cash.
World Federation of Stock Exchanges.
Somebody (or something) that is holding assets on behalf of another person; for example, a Swiss bank holding money in trust for a customer in another country. See also Trustee.
An amount typically deposited with a Swiss Bank which will redeposit the sum with a third party bank outside Switzerland in its own name (to eliminate Swiss withholding tax on interest).
Short for first in, first out, a fundamental accounting principle which says that any fungible raw materials being used in a business are to be costed on the basis that the first to come in (probably the cheapest) are deemed to be the first to go out. Contrast with its opposite, LIFO.
A means of narrowing the scope of a computer report or view by specifying ranges or types of data to include in or exclude.
The last stages in an assembly process before a product rolls off the production line.
The dividend paid by a company at the end of its financial year.
A company engaged in making loans to individuals and businesses. Unlike a bank, a finance company does not collect deposits from retail customers. Rather, it raises funds by borrowing from other financial institutions and from the wholesale money markets.
The executive director on a company's board who is in charge of the company's financial position.
The process of reorganising a company's finances, either by raising money from one source (a bank, say) to pay off another (trade creditors, perhaps); or by extending the maturity of the company's borrowing, raising long-term bonds, for instance, in order to repay short-term bank loans.
Any company or organization whose business is finance. This includes banks, insurance companies, pension funds and factoring companies.
A written record of the financial position of an organization, consisting normally of a balance sheet, an income statement and a cash flow statement.
The 12-month period for which an organization prepares its financial statement. This may or may not coincide with the calendar year.
Read the pages of the U.S. Government's Financial Crimes Enforcement Network and see how they view your rights to financial privacy, based on the spurious 'war on drugs' policy!
A fee paid to someone for bringing together two (other) parties who make a deal and do businss together. The fee may be a flat fee, or it may be calculated as a percentage of the value of business arising from the meeting.
Goods which have completed the manufacturing process and are now ready to be sold to a final consumer.
To bring someone's employment contract to an end, often an abrupt one.
Strictly speaking, a business entity that is not incorporated; for example, a firm of lawyers who do business as a partnership and not as a company. The word has come to be used more widely, however, to refer to all but the largest business organizations.
A right given by the owner of an asset to a potential purchaser to match anybody else's offer for that asset. Such rights are often given, either by contract or by law to tenants of state-owned apartment blocks.
Of the public finances, particularly in relation to the raising and collecting of taxes.
The 12-month period used by governments for their accounting purposes.
An asset that is used in a business for some period of time and that is not easy to move, such as a building, land or machinery.
A cost that does not vary in proportion to the amount of goods or services that are produced; the opposite of variable cost. Fixed costs, such as the amount paid for rent and depreciation, are unrelated to a company's turnover. They are incurred whether it is selling a lot or a little.
An interest rate that does not vary until the financial asset to which it is attached comes to maturity. A ten-year fixed-rate loan has its interest rate fixed once and for all at the beginning of its ten-year life.
Flag of Convenience:
The flag of a ship is the flag of the country of its registration. The term "flag of convenience" refers to the flag of a country (in particular Liberia and Panama) which is chosen for ship registration in order to achieve fiscal benefits (no income tax being levied by such countries on international shipping operations) and other non-tax advantages relating to lower labor costs and manning scales, officer and crew requirements, trade union practices, etc. Ownership of the ship is normally vested in a company incorporated in the country of the flag.
In addition to Liberia and Panama, the following countries offer or are preparing incentives to offer flag of convenience facilities: the Cayman Islands, Costa Rica, Cyprus, Gibraltar, Haiti, Honduras, Hong Kong, Malta, Morocco, the Netherlands Antilles, Madeira, Vanuatu and Singapore.
A fixed price for goods or services. For example, the unit price for goods is the same whether you buy 10 units or 10,000; there is no discount for buying in bulk. Or the price charged for auditing a firm's accounts is fixed at a flat rate, regardless of how many hours it takes.
A manufacturing system that can be rapidly switched from making product A to making product B, as and when market demand dictates.
A schedule of working that allows employees to choose their working hours around a core period, usually in the middle of the day. They can thus work from 8am to 4pm if they with, or from 10.30am to 6.30pm. Within this framework, employees have to fit a fixed number of working tasks that require a team effort.
The movement of large sums of money from one country to another to a) escape political or economic turmoil; b) avoid aggressive taxation; or c) to earn higher rates of interest or capital gains.
Money that flows offshore likely never returns. Flight is exacerbated by a lack of confidence as government grows without bounds.
A charge that floats over all a borrower's assets. If the borrower should fail to repay the debt to which the charge relates, the lender can lay claim to any of the borrowers' assets up to the value of the loan.
An interest rate that fluctuates according to market rates, the opposite of fixed rate.
There are two business-related meanings:
- The floor of a stock exchange is the physical room in which brokers transact their business. As their business nowadays almost all takes place by telephone or computer, this sort of floor is becoming increasingly rare.
- A lower limit placed on a variable price in a contract. This can be a minimum interest rate to be paid on a floating-rate loan, for instance, or it can be the lowest acceptable bid on a painting at auction.
The obtaining of a quotation for a company's shares on a recognised stock exchange. Exchanges have extensive rules on how this can be done.
A diagrammatic representation of any process involving a series of steps. It may be a manufacturing process, such as the production of an automobile, or a strategic process, such as the way in which a company intends to enter a new market. The flow chart will show which steps need to be taken first and which can wait until later.
Flow of Funds:
The ways in which money moves around a country's financial system, from banks to consumers, to producers, to government, and back to banks again.
Short for fast-moving consumer goods, things like foodstuffs and toothpaste that do not stay on shop shelves for long. The key to selling FMCGs profitably lies in the logistics of getting them from producer to consumer.
Short for free on board, a term attached to a price quotation given by an exporter. FOB signifies that the exporter undertakes, for the given price, to deliver the goods as far as the buyer's chosen means of transport – a port or railway station, for example. The French expression is franco à bord.
A small group of consumers who are brought together for the purposes of market research, usually to discuss in some detail the merits of a particular product or service.
The area on the ground that is reached by a signal from a satellite. For satellite broadcasters this is their potential market, the bait with which they try to entice advertisers.
A clause in a contract which abrogates the parties from responsibility in the case of events beyond their control – such as an earthquake or the outbreak of war – that prevent them from fulfilling their side of the contract.
Any sale that has to take place immediately, denying the seller the opportunity to look around and wait for a better price.
An estimate of future economic or market data.
Foreign Bank Accounts (U.S.):
Every United States resident, partnership, corporation, estate or trust must advise the United States Treasury of any financial interest in or signature authority over a foreign bank, securities or other financial account in a foreign country and must report that relationship each calendar year filing Form 90-22.1 with the Treasury Department on or before June 30 of the succeeding year. This report must be at the following address: United States Treasury Department, P.O. Box 28309, Central Station, Washington, DC 200005.
A "foreign country" includes all geographical areas located outside the United States, Guam, Puerto Rico, and the U.S. Virgin Islands.
Foreign Base Company Sales Income:
Gross income in the form of profits, commissions, fees, or otherwise, derived by a controlled foreign corporation (CFC) from the purchase or sale of personal property on behalf of a related person, or from the sale of personal property acquired by purchase and with respect to which either the customer or the supplier or both are related persons.
Foreign Base Company Service Income:
Income derived from services performed for or on behalf of a related person and performed outside the country where the controlled foreign corporation of property manufactured by it and performed prior to the time of the sale, or services related to an offer or effort to sell such property do not constitute foreign base company services income but are considered to be sales income.
Foreign Controlled Corporation:
A foreign controlled corporation is a United States corporation or foreign corporation engaged in trade or business within the United States which must file an information return on Form 5472 subject to a $1,000 annual penalty for each year the information is not reported.
A corporation organized under the laws of a foreign country and whose parent company in the home country may participate in any percentage of shares of the affiliate corporation.
The currency of a foreign country. For everybody but Americans and Puerto Ricans, the US dollar is a foreign currency.
Foreign Currency Account:
An account maintained in a bank in another currency than the currency of the country in which the bank is located. Foreign currency accounts can be maintained for depositors by banks in the United States.
Foreign Direct Investment:
A substantial investment by a resident of one country in the industry of another. Foreign direct investment (FDI) includes all purchases of stakes of more than 10% of a foreign company, and all investment in greenfield sites abroad.
Methods of making payment from one country in the currency of another, either electronically or by the exchange of notes and coins.
Foreign Investor in Real Property Tax Act of 1980 FIRFTA) US only:
Under FIRPTA and the US Economic Recovery Act of 1981, unless an exemption is granted by the IRS, upon the sale of real property owned by an offshore (foreign) persons, the agency/attorney or excrow officer handling the transaction is required to withhold capital gains taxes at the closing of the sale transaction. Unless withheld and submitted to the IRS, the party handling the sale transaction is personally liable for the taxes.
Foreign Personal Holding Company Income:
Investment income such as dividends, interest, royalties, annuities, gain from the sale or exchange of stock or securities, gains from futures transactions in commodities, rents or royalties (other than rents and royalties derived in the active conduct of a trade or business or rent and royalty income received for the use of property within the country under which the laws of the controlled foreign corporation is created or organized) and certain miscellaneous types of income not relevant to tax haven background.
Foreign Sales Corporation:
A foreign subsidiary corporation of a United States parent company that exports goods to the aforementioned subsidiary at arm's lenght transactions but with a 30% or 32% reduction of corporate income taxes on the profits representing the sale to the foreign subsidiary located in a designated country qualifying under the Caribbean Basin Inititative Exchange of Information Agreements or double taxation agreements of the United States.
A trust with the same basic qualities as a domestic trust, it is distinguished by these special features: (1) it has a foreign trustee, possibly a bank, that holds the assets on the terms set out in the trust deed but need not keep them in the tax haven; (2) it is established by an individual in another country than that in which he maintains his domicile; and (3) it is subject to the laws of the country in which the trust instrument is drawn up. No tax or a low rate of tax is paid on income accruing to the trustee. The trust is a living ("inter vivos") and is usually created in a country having common law jurisdiction, with provision for a change of jurisdiction in case of unfriendly legislation. The agreement may provide for accumulation of income for some years before distribution. Trusts are not subject to exchange control regulations. A common law trust established in a present or former British territory is more flexible than a civil law (statutory) trust. A foreign trust must be properly registered and created in a foreign country by a person (resident or citizen) of another country which represents that portion of the foreign trust attributable to money or property transferred to it directly or indirectly by a person outside the country which represents that portion of the foreign trust attributable to money or property transferred to it directly or indirectly by a person outside the country where the trust is registered and created. Generally it is peferable to transfer cash since many countries require a record of the property transferred or other assets because of the possibility of capital gains tax upon sale of securities or gift taxes on donated assets. The Internal Revenue Service proposed regulations reflecting the changes made in the Small Business Job Protection Act of 1996 define a "foreign trust as any trust (1) if a Court within the United States is able to exercise primary supervision over the administration of the trust and (2) one or more United States fiduciaries have the authority to control all substantial decisions of the trust." Under the regulation, a foreign trust is taxed the same as a non-resident alien. As a result of the changes, many inbound trusts that were grantor trusts are now non-grantor trusts. Thus, distributions of trust income to the United States beneficiaries of non-grantor trusts are taxable to United States beneficiaries and are subject to the interest charge on accumulation distributions.
Foreign Trust Beneficiary:
The person for whose benefit a foreign trust is created.
Foreign Trust Fiduciary:
An individual or corporation holding a position of trust and having the right and power to act for the benefit of another person. A trustee of a foreign trust is said to have a "fiduciary relationship" with the individual who sets up a trust and those who benfit from it.
Foreign Trust Grantor (also known as Creator or Settlor):
The person who establishes a foreign trust.
Foreign Insurance Trust:
A particular kind of "living" consisting partly or wholly of trust life insurance policies during the insured's lifetime and/or life insurance proceeds after the insured's death. A "living trust" is a personal trust created by an individual during his or her lifetime.
Foreign Irrevocable Trust:
A foreign trust that cannot be changed by the person setting up the trust. This type of a trust must run for a specified term. A revocable trust, the opposite of an irrevocable trust, may be revoked or amended at the option of the person who sets it up.
Foreign Testamentary Trust:
A foreign trust created under a person't will. It does not become effective until after the grantor's death, when the will itself becomes effective.
A person or institution holding legal title to property held in trust for the benefit of another.
Buying without recourse of obligations, usually trade drafts or promissory notes, arising from international transactions. The buyer of the obligations explicitly foregoes his legal right to a claim upon any previous owner of the debt when endorsing "without recourse." The seller of forfeitable trade drafts or promissory notes usually is an exporter who has taken the obligations in full or part payment for goods supplied and who wishes to pass on all risks immediate cash. Forfeiting is at fixed rates, medium-term, and generally covers bank or Government-related risks. Transactions are not limited in amount and usually are concerned with capital goods financing.
There are at least three meanings:
- A forward contract is a contract that specifies the details of a deal to be consummated in the future, such as the sale of wheat next September.
- Forward cover is the buying today of the means to meet an obligation in the future.
- To forward something is to act as an intermediary by sending on to a third party something that you have received.
A business or an individual that arranges for the shipment of freight.
A body organized under legal rules, usually statutory, allowing a founder to effect the management of wealth or other property for the benefit of another person or for a purpose. Chieftly used in civil law jurisdictions for many of the same functions as trust, foundations have legal personality and are liable for their own obligations. They must be administered by a managing council composed as a corporation or members who are individuals but they do not have shareholders. The founder donates the initial assets to a foundation and may be a beneficiary. Varieties of foundations used as trust surrogates include family foundatios and private foundations. (Also see Stiftung)
A contractual agreement in which one party (the franchisee) buys the rights from another (the franchiser) to sell goods and services as specified by the franchiser. McDonald's and Benetton are well-known examples of franchises.
An act of deception that is aimed at gaining financial benefit at the expense of others. Tinkering with companies' accounts is a common form of fraud.
Originally, a medieval mercenary who lent his lance and fighting skills to the highest bidder. Then used to refer to a journalist with no affiliation to any particular publication. Now it is used to refer to any person who works for themselves rather than for an employer.
A port where no duties are imposed on ships that unload cargo. Free ports are designed to be places where cargoes are transferred from ship to ship, in transit to their ultimate destination.
The economic principle that optimal growth is achieved when trade among countries is unhindered by tariffs or visible barriers.
Free Trade Area:
A region, such as the European Union, where a number of national governments agree to remove any existing barriers to trade between them.
Free zones are designated areas, which receive special treatment through their exclusion from the area to which the country's normal customs rules apply. A free port is one at which imports may be landed without paying customs duties. The system of free zones or free ports favors export processing, transshipment and the entrepot trade since there is no need to pay and then reclaim customs duties.
Though free zones are often part of a tax incentive package in what would otherwise be a high tax jurisdiction, they may also be found in tax havens, e.g. Freeport in the Bahamas.
Any goods that are in the process of being transported by road, rail, sea or air.
An agent who handles the shipment of exports, in particular the documentation required to get goods from their point of manufacture to their shipper.
Benefits that employees receive in addition to their normal wage or salary. They include such things as pensions, private health insurance, cars, low-interest loans and canteen facilites. In some companies they are worth as much as one-third of a person's total remuneration.
The opposite of the back office, the place where a business has direct contact with its customers, be it a shop, a showroom, or a telephone sales operation.
Assets that a court has decreed cannot be used by their owner. The freeze may be only temporary, to be removed once the reason for its imposition has gone. Assets are often frozen when the ownership of the assets is in question.
File Transfer Protocol is a standard method of sending files between computers over the Internet.
The most commonly used stockmarket index in the UK, based on the price movements of the 100 largest companies quoted on the London market. Its name is an amalgam of its two founders, the Financial Times and the London Stock Exchange.
The process of satisfying an order received by direct mail. Much of the fulfillment process these days is carried out by computer.
A fulfillment house will take orders for your products through their 1-800 number, provide a "live" operator for your buyers, package your goods, and then ship them… all while providing you with a complete online record of the transactions.
An economy is said to have full employment when there are jobs available for every citizen who wants to work.
The work done by a self-contained part of division of a business; for example, the marketing function or the personnel function.
Usually seen in the phrase "fully funded", to refer to a pension fund whose investments are sufficient to pay all its obligations as and when they become due. In other words, the fund does not need to rely on future contributions to meet its present obligations.
Money set aside for some specific purpose, often in a tax-advantageous way.
The quality of things, such as notes and coins or grains of sand, where any one individual specimen is indistinguishable from any other. Anything to be used as a store of value (be it beads or gold coins) has to be fungible.
Contracts agreeing to buy something in the future for a price that is fixed in the present. Futures began in agricultural markets in order to enable farmers to sell in advance crops that had not yet ripened. They have spread more recently into financial markets.
A forum for the finance ministers of the seven largest developed economies – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – to discuss economic and financial matters.
The G-7, plus Russia.
General Accounting Office (U.S.A.).
A technique used by a market researcher to identify gaps in a particular market. Once identified, companies can set out to fill the gaps, thereby meeting unrequited consumer demand.
The acronym for General Agreement on Tariffs and Trade, the GATT was established in 1947. In it member countries agreed systematically to reduce the trade barriers between them. This was achieved in a series of rounds (the Tokyo Round, the Uruguay Round, and so on) which have taken trade liberalisation further and further. Since 1997 the GATT has been the responsibility of the WTO.
Gulf Co-operation Council. Member states: Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Bahrain and Oman.
"Gross Criminal Product".
Short for gross domestic product, the sum of all output of goods and services produced by a nation. GNP (gross national product) is GDP plus net income from abroad, (for example, the rent and profit received from other countries minus the rent and profit paid to those other countries).
A strike involving almost all sectors of the economy. General strikes are usually organised as workers' protests against general social conditions rather than aginst their own specific pay and contract.
A lifestyle defined in a book of the same name. Generation Xers are, roughly, people born between 1965 and 1980, and they differ from other generations in that they are less inclined to seek full-time, lifetime employment. Instead, they prefer a series of short-term contractual arrangments.
A product that is sold with no brand name. Pharmaceuticals are said to become generic when they are no longer protected by patent and can be manufactured and sold by anybody.
Gesellschaft mit beschränkter Haftung (GmbH):
German private limited company without shares.
Security issued and guaranteed by the Government.
A bond that is believed to be exceptionally high quality (in terms of its ability to pay interest and capital as and when they fall due). The term is applied particularly to British government securities, once known as gilts.
Graphics Interchange Format is an image file format commonly used in HTML documents.
The invisible barrier that prevents women from reaching the top echelons of organisations in the proportion that their numbers in business suggest they should.
A portion of the Banking Act of 1933 which prohibits banks from entering into the securities business and prohibits security firms from accepting deposits. However, securities issued or guaranteed by a bank are not subject to the Securities Act of 1933. Therefore, bank instruments, by virtue of being issued by a bank, are not considered a form of securities.
A strategy in which companies aim to sell their products and services all around the world. Driven by the convergence of consumer tastes from Tvilisi to Timbuctoo, globalisation presents companies with opportunities for achieving economies of scale.
Short for Gesellscaft mit beschrankte Haftung, a German form of incorporation roughly equivalent to alimited liability company.
General National Product.
An assumption made by an accountant when preparing a company's books that the company is going to continue in business for the foreseeable future. If this assumption were not made the company' assets would have to be valued at the (low) price that they would realize in a forced sale.
Provisions in the employment contracts of executives guaranteeing substantial severance benefits if they lose their position in a corporate takeover.
A credit card or charge card with a number of special privileged (such as a higher credit limit) that are not granted to the holders of ungilded cards.
A clause in a loan agreement that relates the borrower's repayment to the value of a fixed volume of gold. Such clauses appear in times of high inflation and when the price of gold is stable.
The terms of an employment contract designed to deter a key employee from leaving. A stock option which is forfeited (or which has to be realized when the employee leaves) is one form of golden handcuff.
A generous upfront payment designed to persuade a person to leave their current employment and to join the organization offering the payment.
A clause written into the contract of senior employees guaranteeing them a generous payment if they should lose their job for any reason, or be downgraded. Golden parachutes provide protection to senior executives in the case of a takeover. They also discourage new owners from laying off the existing management and replacing them with their own employees.
A share which gives the holder special rights, in particular the right of veto when there is a takeover bid for the company. Governments often like to retain such shares when privatising sensitive industries, such as telecoms or defence.
A twice-daily agreement among the biggest dealers in the gold market as to what the market price of the precious metal should be. This was an important event when governments pegged their currencies to a fixed amount of gold (the days of the so-called gold standard). It is not so any more.
The principle of acting reasonably and honestly. In many countries there is a legal duty for all parties to agreements to act in good faith.
Movable property manufactured for the purpose of being sold to customers.
An accounting term for the difference between the amount that a company pays for another company and the market value of the other company's assets. Goodwill is thus an intangible asset representing things like the value of the company's brand names and the skills of its employees.
The form and style in which a company is governed, by the law, by its own statutes and by custom. This can vary greatly from country to country. The roles of the state in France, of banks in Germany and of shareholders in the United States in the governance of corporations are uniquely powerful.
General Power of Attorney.
With GPRS (General Packet Radio Service) you can be continuously connected to data networks and access your favorite information and entertainment services. Just turn on, tune in, and download - whenever you like. GPRS is the perfect bearer for many kinds of applications: Multimedia messaging, Imaging and browsing.
GPRS utilizes packet switching technology where information is transmitted in short bursts of data over an IP-based network. GPRS provides a quick session set up and fast data transmission speeds. GPRS can use multiple time slots for data transfer as opposed to a normal single time slot.
The time between the granting of a loan and the first repayment. It is also the amount of time allowed by a loan or insurance contract between an overdue payment and cancellation of the contract.
A clause in an agreement (especially in the GATT) which allows the parties to the agreement to exempt certain things that were in existence in their own laws before the agreement was reached.
Money provided for a business project from outside normal commercial sources. For example, a government grant that is given to encourage a company to build a new factory in a particular place.
Under US tax law, income of the trust is taxed as the income of the grantor.
A previously agricultural site outside an urban area on which a company builds a factory or office.
A company buying back its own shares for more than the going market price to avoid a threatened hostile takeover.
A market for trading in shares not yet issued; before a new issue has been allocated to investors the shares are traded on a basis of "when issued", denoted by the letters WI.
The total amount of something – gross sales, gross profit, and so on – before taking into account a number of costs, such as tax or depreciation.
Calculation of the amount that would be required in the case of an investment subject to tax to equal the income from that investment as if it were not subject of tax.
A number of companies which are owned by each other or by a common holding company. Most groups consist of a parent company and several subsidiaries.
The accounts of a group in which all transactions between members of the group are netted out. So the group's sales, for example, are less than the sum of the sales of the individual companies withing the group, assuming that at least one of them has sold something to one of the others.
A software program which links people with a common interest and enables them to communicate rapidly and easily with each other.
An increase in some measure or other of a company's performance between one accounting period and another, most often the increase in the value of either its sales or its profit. A country's economic growth rate is the percentage by which its GDP changes over a given period, usually a year.
Short for global system for mobile, a telecommunications project that aims to link national mobile phone systems in a way that will enable cutomers to call around the world with their mobile phones as easily as they do with fixed-line phones.
Short for generalized system of preferences, and agreement among developed countries that they will give preferential treatment to certain imports from developing countries. The GSP allows countries to break the no favouritism rules of the GATT.
An undertaking by someone that they will be responsible for an obligation (a debt or a promise of good behaviour) if the person who is bound by the obligation fails to fulfil it. To be binding in court, a guarantee needs to be made in writing.
Guarantees are often given by manufacturers, promising consumers that their goods will meet certain standards for a certain length of time. These days, however, such promises often provide little more protection to consumer than the ordinary law of the land.
A business academic or management consultant who is known for his or her expertise in a particular business area. Gurus are much in demand in the media.
To gain unauthorised access into somebody's computer system from a computer outside it.
A person, often young, who is skilled at gaining unauthorised access into other people's computer systems.
A currency that does not normally depreciate (that is, loose its value) against other currencies over time. It is sufficiently sound so that it is generally accepted internationally at face value. For this reason hard currencies – the US dollar, the D-mark and the Swiss franc – are favoured for denominating international trade. The Euro is widely expected to become a hard currency to rival the dollar.
The term "hard currency" is a carry-over from the days when sound currency was freely convertible into "hard" metal, i.e. gold.
The bits and pieces of any computer system that can be kicked, that is, they take up physical space. The opposite of software.
An exceptionally forceful attempt by a salesman to sell goods or services to a consumer. A hard sell can backfire it is intimidates the consumer to such an extent that it puts him off making a purchase.
High-speed circuit-switched data.
A person or firm employed by a company to help recruit someone to fill a senior post, usually by persuading skilled employees elsewhere to change jobs. Headhunters are more pompously known as executive search consultant.
The place where a company's senior executives have their offices and where its board holds its meetings. It may or may not be the officially registered addresss of the company.
A company organized in a foreign country, usually a tax haven, which exclusively services its affiliate companies through managing or administering activities. It does not buy or sell products and does not involve itself in financing activities as may be practiced by offshore holding companies. A headquarters company is a fixed installation belonging to a foreign enterprise or an international company having its registered office in a specific foreign country selected because its laws permit it to act for the sole benfit of one or more companies in a group for the purpose of performing management control, servicing or coordination functions, usually in a specified geographical area. The headquarters company generally is allowed a tax deduction by granting permission to base its taxation on a national profit amounting to approximately 5% to 8% of the total operating expenses incurred in the particular country where it is organized to operate as a headquarters company. In some countries, i.e., the Philippines, there is no taxation on income and expenses are not used as any base of computation. In other countries, i.e., France, the headquarters company may be either an incorporated company of the host country or a branch of an international company.
An industry which produces heavy goods and uses heavy equipment to do it. Examples are the steel, automobile and shipbuilding industries, which are both labour intensive and capital intensive. The opposite of light industry.
A means of reducing the risk of loss from future good hedge against the reduction in the value of money that occurs at a time of inflation. International businesses seek to hedge aginst the risk from movements in foreign-exchange markets. Those that do not have on occasions lost out badly.
A flexible investment fund for a limited number of large investors (the minimum investment is typically US$1 million). Hedge funds use almost all investment techniques, including those forbidden to mutual funds, such as short-selling and heavy leveraging.
A technique of protecting an individual or firm from future risk of loss due to price fluctuations by means of buying and selling commodities or securities and, in recent years, foreign exchange in increasing amounts. Although commodity dealers have resorted to hedging for centuries, particularly because of possible losses from such unforeseen circumstances as inclement weather, many multinational corporations, banks and individuals have been forced to rely heavily on hedging since 1970 because of the inception of floating exchange rates. By purchasing commodities or foreign exchange at the current market price, or the so-called spot rate, for delivery at some future date, usually 30, 90 or 180 days later, the owner is protected from losses if the price rises. However, if the price falls, the purchaser losses if the price rises. However, if the price falls, the purchaser loses on inventories but gains on future sales, because he has contracted to buy the commodities or foreign exchange at a later date for a price already fixed at the time the contract was signed. In a world economy of rising prices and fluctuating exchange rates, as experienced in recent years, hedging is becoming an essential part of business life and is destined to be an ever increasingly important element of profitability in the future.
The undisclosed objectives that a person has, usually when participating in a meeting.
The reserves of a company that are not disclosed in its balance sheet. These may arise from an undervaluation of its assets or from hidden bank accounts (abroad).
High Net Worth Person/Individual:
Jargon used in the investment world for an individual with more than $1,000,000 in liquid assets to manage.
Short for high technology, modern advances in science that have found industrial and commercial uses. Often associated with developments in information technology.
The cost of an asset on the day that it was purchased; its original cost. Contrast with replacement cost. In the United States it is known as historical cost.
An action on the Web site, such as when a user views a page or downloads a file.
A company whose activity is limited to holding and managing investments or property but not having ordinary commercial or trading activities. The requirements to achieve holding company status vary in different countries (in particular Liechtenstein, Luxembourg, Nauru and the Netherlands).
Holding Company (Luxembourg):
A Luxembourg holding company is exempt from all forms of Luxembourg taxation but its activites are restricted to the holding of shares and certain other investments. In particular the company may not advance funds to its shareholders, invest in commodities or futures or carry out any sort of commercial or industrial activity. The company may only hold property in so far as it is necessary for its own use but could, for example, own the shares of a property investment company. This type of company is specifically excluded from the tax treaties signed by Luxedbourg except the treaty signed by China.
The main page of a Web site. The home page provides visitors with an overview and links to the rest of the site. It often contains or links to a Table of Contents for the site.
Home Page URL:
The local path or Internet URL to the default page of the Web site for which WebTrends reports will be generated.
A person who works from home using some basic sort of equipment, for example, a computer, a telephone or a knitting machine.
The integration of companies that are in more or less the same line of business. Daimler-Benz merging with Chrysler is a case of hirizontal integration; Daimler-Benz getting into the defence industry is not.
A takeover in which the company being taken over does not wish to be bought. A company subject to such an offer sets about resisting it or finding an alternative.
Capital with no allegiance to any particular market. It flows rapidly and frequently across borders in search of nothing more than the highest shortterm return. Hot money may also be moving rapidly because it is being chased by tax inspectors or fraud investigators.
Hyper Text Markup Language is used to write documents for the World Wide Web to specify hypertext links between related objects and documents.
Hyper Text Transfer Protocol is a standard method of transferring data between a Web server and a Web browser.
The people who make up the workforce of an organization with their various strenghts and weaknesses. Human-resource management is concerned with getting the best out of these resources for the benefit of the organization.
The rate of return that has to be achieved by an investment for it to be considered a success. This may be its cost of funds, or it may be the return on equity (roe) achieved by other firms in the same industry.
As defined by the temporary regulations of the Internal Revenue Services, a hybrid entity is an entity that has (1) a single owner (including ownership through branches) that is either a controlled foreign corporation or a partnership which is a controlled foreign corporation in which a controlled foreign corporation is a partner (either directly or indirectly) through one or more branches of partnerships; and (2) is treated as fiscally transparent by the country in which the payor entity, any owner of a fiscally transparent payor entity, the controlled foreign corporation, or a intermediary partnership is created, organized or has substantial assets.
Companies which are limited by guarantee but which also have a share capital having shareholding members and non-shareholding members with control designated in the corporate Articles to either or both of these groups of members may be used as regular companies. Many "hybrid" companies are especially popular because disclosure of identity of the members (including shareholding members) is not required in the annual return. Membership control may be granted to non-shareholders without reference in the unusual provisions in the Articel. "Hybrid" companies are used for charitable organizations, professional and trade associations as well as for small or leisure clubs.
A level of inflation that is so extraordinarily high that paper money becomes worthless almost overnight. Under such conditions, with no recognizable store of value, it is virtually impossible to do business in conventional ways.
A Hypertag is a new way of allowing you to access info and content on your mobile phone directly from objects like Adverts and Signs. It works by allowing infra-red mobile phones, and PDAs (e.g. Palm Pilots or Pocket PCs) to interact with a small electronic tag which is attached to the Advert or Sign. To use the system, you enable the infra-red port on your mobile phone and point it at the flashing lights. You wait a few seconds, and then a piece of content will be downloaded to your phone. This can be a word and number or a prompt to remind you of an important event. In the future, you will able to download pictures, ring tones and games from a Hypertag.