Pacific Rim:

Any grouping of countries which have coastlines on the Pacific Ocean.

Packing List:

A formal list of the contents of a container which is sent with the container. The person who receives the container checks that its contents accord with the packing list to see if anything has gone missing in transit.

Page Views:

Also called Page Impressions. Hits to HTML pages only (access to non-HTML documents are not counted).

Paid-up Capital:

That part of a company's authorised capital which has been fully paid for by the company's shareholders.


A wooden frame on which goods are placed when in transit. A pallet is designed to reduce damage to the goods and to make them easier to handle.

Paper Offer:

An offer by one company to buy another in exchange not for cash but for shares in the purchasing company (that is, its paper). The vendor thus merely exchanges the shares of one company fro those of another.

Paper Profit:

An unrealized profit which only appears on paper, that is, as a calculation. For instance, if shares bought for $300 are now worth $500, but their owner has no intention of selling them, the owner can be said to have made a paper profit of $200.

Paper Trail:

The inevitable trail that most transactions leave tracing back to its originator.


The nominal (or face) value of a security. The price written on the certificate that provides proof of ownership.

Parallel Account:

A seperate account established at the trading bank.

Parallel Market:

A market that operates outside the standard market for a product or service; for example, European shares that are sold as ADRS in the United States; or the street vendor who sells goods ourside a store which also sells the same goods, but at a different price.


A constant that helps to set a framework for considering issues that are variable. For example, a company's parameters for determining its strategy for the next year could be that the rate of growth of the economy will be 3% and that it wants to increase its market share by 10%.

Parent Company:

A company which owns one or more subsidiaries.

Parkinson's Law:

First expounded in 1958 in a book written by a history professor, Cyril Northcote Parkinson, the law says that "work expands to fill the time available for its completion". Another allied law says that expenditure rises to meet income.

Partly Paid:

Shares for which a shareholder has paid only part of the amount that is due. The rest of the payment can usually be called for at the issuer's discretion.


Two or more people who get together to undertake a business for profit, but without becoming incorporated as a company. This is a common form of organization among professional people such as lawyers and accountants. In some countries partnerships have a separate legal existence; in others there is no legal existence separate from that of the individual partners themselves.

A partnership often offers useful features for the purposes of an overall tax plan. In certain jurisdictions, a partnership may have corporate attributes and resemble a company. However, even where a partnership does not have corporate attributes, requirements relating to formations and registration the nationality and/or residence of partners, limited liability, restrictions on activities, should be examined in the context of the general law governing local partnerships.

Part Shipment:

The shipping of one part of a larger order or consignment of goods. Part shipments can create problems if the documentation is not handled properly.

Part-time Work:

Any work that takes up less than a normal full working day. Part-time workers are rarely entitled to the same pension and health benefits as full-time workers.

Par Value:

Par value, an accounting term which is rapidly being discarded, is the face value assigned to shares of stock. For exemple, if shares have a par value of $1 per share, the shares must be sold for at least $1. They may be sold for more, and if so, the first $1 per share is allocated to be paid in capital account of the corporation. If the stock is no par, the board of directors retains the discretion to set a price for the shares and to allocate whatever portion of that price it chooses to the paid in capital account.

Passenger Mile:

One airline passenger carried one mile; this is calculated by multiplying the number of miles traveled times the number of passengers.

Passive Investor:

An investor in a start-up company who is looking only for financial gain. A passive investor has no interest in being involved in the running and building of the business.


Official document proclaiming the citizenship of an individual.


A closely guarded sequence of alphanumeric characters which have to be entered into a computer before gaining access to it and its software programs. The password acts as a security device.


A document given to an inventor by a registered authority granting the inventor the exclusive rights to manufacture and sell his invention in a specified market for a specified period of time. When that time is over, the product is said to come off patent.

Patent Pending:

Notification, often written on the side of a product, to say that a patent for the product has been applied for, but has not yet been granted.

Paternity Leave:

Time that a male employee is allowed off work to help his partner with a new-born child. During paternity leave the father's job remains open to him, awaiting his return.

Payback Period:

The amount of time that it takes for an investment to pay for itself; that is, the time untilthe discounted income from the investment exactly equals the capital put into the investment.


The day on which employees receive their pay.


The acronym for pay as you earn, a way of collecting income tax at source, that is, from full-time employees as and when they are paid.

Payment Date:

The date on which an acknowledged payment is due; for example, dividends that have been declared but not yet paid, or an invoice for work done that is due to be paid a fixed number of days after the work has been completed.

Payment Method:

The means by which a due payment is made, that is, by cash, check, credit card, bank draft, or whatever.

Pay Order:

A document which instructs a bank to pay a certain sum to a third party. Such orders are normally acknowledged by the bank which provides a guarantee that the payment will be made.


The list of all the employees within an organization that are paid on a regular basis. Also the aggregate total of all that is paid to those employees on a regular basis.


Guarantees issued by prime banks. In this context the word prime is an adjective and not a noun, meaning that the bank issuing the bank guarantee is of prime status, one of the top international banks.


Short for personal computer, a stand-alone computer customized for each individual user. The PC-marked a revolution from earlier generations of computers which had been large centralized marchines operated by specialists.

P/E Ratio:

Short for price/earnings ratio, the ratio of a share's stockmarket price to its earnings per share. The ratio is seen as a key indicator of whether a company is over-valued or not. Each industry has a P/E ratio that is considered more or less average for that industry.


An income that is paid after someone's retirement from work because of contributions that were made to a fund during their working life. Pension contributions are a standard perk offered by companies to attract and retain good employees.

Pension Fund:

A fund set up to meet the pension obligations of an organization. In many countries pension funds are among the largest investors in the stockmarket.


An extremely low nominal rent paid for business premises, often because the premises are due to be redeveloped at some uncertain future date and may have to be vacated at short notice.

Per Diem:

A daily allowance given to an employee to cover expenses, for things like travel and entertainment, incurred in the course of their work.

Performance Bond:

A written commitment to perfom a piece of work to a specified standard and within a specified period of time. Failure to meet the criteria of the bond can lead to the payment of heavy penalties. Performance bonds are common in the construction business.

Performance-related Pay:

Relating a significant proportion of an employee's pay to their performance. The concept is hard to put into practice because of the difficulty in finding a quantifiable measure that is genuinely related to an individual's performance. The most obvious candidates, share price and profit, have obvious shortcomings.

Perishable Goods:

Goods which perish fairly quickly, such as fresh fish, fruit or dairy products.


Short for perquisite, an incidental benefit that accrues to an employee because of his or her employment. For example, someone who works in a restaurant might expect free meals to be one of the perks of the job.

Permanent Establishment:

Cited in virtually all basic income and fortune tax treaties, it is described in the Model Convention of the Organization for Economic Cooperation and Development as "a fixed place of business in which the business of the enterprise is wholly or partly carried on. "It includes a place of management, branch, office, factory, workshop, mine or quarry, and building site or construction or assembly project existing for more than 12 months. It does not include storage, display and delivery facilities. An enterprise in one signatory to a treaty is not deemed to have a permanent establishment in the other signatory merely because of carrying on business through a broker, general commission agent, or other independent agent. Advantageous treaty provisions for taxation of dividends, interest and royalties are in many cases negated if an enterprise located in one signatory has a permanent establishment in the other territory. A permanent establishment may also be regarded by tax authorities as creating domestic source income liable to income taxes. Practically all industrial and above even before adoption of the O.E.C.D. Model Convention.

Perpetual Notes:

Financing instruments used by United States companies investing in the United Kingdom, that are treated in the United Kingdom as loans with interest deductible and as equity in the United Kingdom as loans with interest deductible and as equity in the United States, and as dividends received by United States shareholders considered as a tax-free return of capital to the extent of the investor's cost basis in its investment.


Traditionally, the department in an organization which looks after the day-to-day requirements of its employees. Nowadays it is likely to have been rebranded as human resources.

Personen- und Gesellschaftsrecht:

Law applicable to individuals and corporate bodies in Liechtenstein.

Peter Principle, The:

A rule first enunciated in a 1969 book by Laurence J. Peter. The Peter Principle says that every employee eventually rises to their level of incompetence. Also expressed as "cream rises until it sours".


Dollars earned by petroleum-producing countries from the exports of oil to all countries but labeled "Petrodollars" because payments for the petroleum almost always are required to be in United States dollars. This practice stems from the traditional preference of the petroleum-producing countries, including Venequela, Canada, Iran and the Arab countries, to invoice their sales in United States dollars. Payments for oil exports historically have been for cash so that the oil producers have accumulated substantial funds at an unprecedented rate. Because the oil producers are principally developing countreis, their economies cannot absorb the great inflow of dollars in an orderly fashion. Thus, they are constantly seeking profitable investments in foreign lands. Simultaneously, all of the world's leading industrial nations and many developing countries which do not produce oil are bidding for a portion of these huge sums. In an effort to avoid upsetting the economies of the world and to allot the petrodollars abroad in an orderly manner, the leading international financing organizations, including the World Bank, European Economic Community, Bank for International Settlements, and the Organization for Economic Corporation and Development, are assisting the oil producers, particularly the Arab countries, in investing the billions of dollars from petroleum sales.

Petty Cash:

Small amounts of cash retained in the workplace for making occasional small payments in cash – for milk, stamps, and so on.


An employee who stands at the entrance to his or her place of work during an industrial dispute in order to persuade other employees (and/or suppliers and/or customers) not to enter. In many countries where picketing is legal, secondary picketing (the picketing of somebody else's place of work) is not.

Pie Chart:

A widely used diagrammatic way of presenting business statistics. A pie is drawn to represent the whole of, say, a market or business, and the pie is then divided into slices whose size is proportional to the shares of the whole that each one represents.

Piece Rate:

A method of payment for work based on the quantity produced, in contrast to the more common method of payment which is based on the number of hours worked.

Piece Work:

Work that is performed by outsiders who are paid on a piece rate basis; common in the garment industry.


A trial run on a modest scale to test the feasibility of something much bigger. For example, the manufacture of a small number of items of a product to see whether it is worth gearing up for their mass production.


The acronym for personal identification number, the number required by individuals to gain access to electronic information that is personal and private to them. PINs are most commonly used in association with plastic credit cards.


There are two business-related meanings:
  1. To make a prepared presentation with the aim of securing a contract or sale.
  2. The physical space where a street trader (or a stockbroker who operates on the floor of an exchange) has their stall.


A method of selling securities in which the securities are placed with a small number of investors. A placements is usually done privately, in contrast to the other main way of selling shares (which is through a public offering). A placement is cheaper than a public offering, but the price obtained for the securties may be less.


The formal process of planning for the future of a business. Traditionally, this occurs at regular intervals and involves managers outlining a series of actions for the business over, say, the next ten years.

Plant and Equipment:

A collective term for the tools and machines required to carry on a business; everything apart from the buildings and the workforce.


The operating system (i.e. Windows 98, Windows NT, etc.) used by a visitor to a Web site.

PLC - Public Limited Company:

A UK public limited company (also exists in the Channel Islands).


Private Mail Box. When you lease a private mailbox (PMB) from a private business, rather than a PO box from the United States Postal Service, you receive a PMB number.

Point of Sale:

The place where a sale is made. This is usually a shop, but it can be a telephone or an order form in a mail-order catalogue.

Point to Point:

A term for using individual airline fares from city to city.

Poison Pill:

A tactic followed by a company to make itself less attractive to a potential buyer. It might include an agreement to distribute large sums of money to shareholders and employees, a distribution that is triggered only by the appearance of a takeover bid.


A marketing expression for the whole of a potential market for a particular product or service.


Internet general-purpose starting point.


A mixture of assets (usually financial) that belong to a single owner, either an individual or an institution. A portfolio might typically contain shares, bonds, gold and cash.

Portfolio Manager:

The person who looks after an investor's portfolio, buying and selling financial assets (on behalf of the investor) in search of a chosen investment target.

Portfolio Work:

A form of work in which an individual has a number of regular jobs which he or she performs at various times throughout the working week.

Portable Pension:

A pension that is a perk of one particular job and which the beneficiary can take with them (and continue to fund) as and when they change jobs.


There are several business-related meanings:
  1. A particular job in an organization (as in, she has a senior position at The Economist).
  2. An investor's stake in a particular financial market (including what it owns and what it is contractually obliged to buy and sell in the future).
  3. The strategic location in a market taken (or aimed for) by a company.


To put a future date on a financial instrument (such as a check) so that the payee cannot obtain payment untill that date.

Predatory Pricing:

The practice of cutting drastically and deliberately the price of a product or service in order to steal a competitor's market share. By implication, predatory pricing involves cutting prices so that the profit margin is zero or negative. Hence it can only be done as a short-term measure.


The right to purchase something before others can. It refers, in particular, to the right of existing shareholders in a company to purchase any new issue of shares in the company before the shares are offered to others.

Preemptive Rights (U.S.):

Preemptive rights, another device intended to protect shareholders, enable shareholders to retain their proportional share ownership. If John owns 10% of the issued and outstanding stock of John Doe, Inc., and if the corporation proposes to issue an additional 100 shares of its stock, John would have the preemptive right to acquire 10 shares of the new issue on the same terms and conditions as the corporation proposed to offer the shares to outsiders. Like cumulative voting, preemptive rights exist in some state unless the articles reject them. In other states, preemptive rights don't exist unless the articles permit them.


Special treatment given by one country to another in respect of trade between them.

Preference Share:

A special sort of share whose dividend payment has preference over the dividend payments to the holders of ordinary shares. In the event of a liquidation, owners of preference shares receive payment efore ordinary shareholders.

Preferential Creditor:

A creditor of an organization who gets priority in certain circumstances, such as a liquidation. Preferential creditors include tax authorities, anyone with a charge on the organization's assets, and lowly paid employees whose wages are overdue.

Preferred Supplier:

A supplier who has a special relationship with a customer. This relationship usually means that the customer will, other things being equal, give the supplier a certain amount of (almost guaranteed) business during the course of a year. In return, the supplier is expected to match certain standards of quality and timeliness.

Pre-filing Notice, US Only:

Mailed by the IRS to parties (tax payers) who are believed to be participating in fraudulent trust programs. The notice requests that the receiver seek professional counsel before filing their next tax return.


The land and building where a business is carried on.


There are two business-related meanings:
  1. A regular payment to an insurer for providing cover against a stated risk.
  2. An amount paid over and above some specified value. In the takeover of a public company, for instance, the premium is the amount paid over and above the price of the company's shares on the stockmarket before the bid appeared.


The settlement of a debt before it becomes due. Some loan contracts impose a penalty fee if a borrower makes a prepayment.


The formal delivery of a business message.


The cost in money terms of a product or service.

Price Sensitive:

A product or service whose sales fluctuate dramatically with any change in its price. Commodity products in markets where there is plenty of competition are particularly price sensitive. A retailer cannot change the price of a basic loaf of bread, for example, without sharply affecting sales.

Price Support:

A minimum price set by a government for a product in order to guarantee that its producers will obtain a certain income for their output. It is usually applied to agricultural products.

Price War:

A fierce form of competition in which vendors successively undercut each others' prices to steal market share.

Primary Market:

The market in which financial instruments are sold when they are first issued, that is, when they pass from the issuer to their first purchaser. Thereafter they are bought and sold in a secondary market.

Prime Bank:

An older term for a well known (top-25, top-100) international bank. The term should be avoided and replaced by "money center bank" or "international bank".

Prime Market:

The market in which financial instruments are sold when they are first issued, that is, when they pass from the issuer to their first purchaser. Thereafter they are bought and sold in a secondary market.


The amount borrowed in a loan or issue of securities. The principal is the capital sum that has ultimately to be repaid, and on which the interest that has to be paid in the meantime is calculated.

Private Company:

A company whose shares are not available to be bought by the general public. A private company is owned by a small number of shareholders who have no obligations (outside the general laws of the land) to reveal information about their business to the public.

Private Placement:

An issue that is offered to a single or a few investors as opposed to being publicly offered.

Private Trustee Company:

A company incorporated in certain offshore jurisdictions, such as Bermuda, to act as a trustee for a limited class or group of trust. Private trustee companies are not permitted to offer trustee services to the public generally.


The sale of a state-owned company to the general public.


The legal process for the distribution of the estate of a decedent.


A number of activities which, taken together, add value to a business. This can be as wide as something like marketing (the marketing process) or as narrow as a small part of manufacturing (the paint-handling process).

Procurement: The purchasing of all the inputs that are required to keep a business running, including raw materials, spare parts and machines.


The final output of a manufacturing process.

Product Liability:

The liability of a manufacturer for any product which it puts on to the market and that subsequently causes damage to a consumer. In developed countries this liability is becoming embedded in law and not dependent on the consumer proving that the manufacturer was negligent.


An economist's term for the output produced in a given time by a unit of any of the three factors of production (land, labour or capital). For example, the return produced by an investment of $1,000 in a year, or the yield in a year from planting wheat on a hectare of land. Its numerical precision makes productivity a useful way of measuring differences in efficiency over time, or the difference between alternative uses of the factors of production.


What is left over in a business after all its bills have been paid. The difference between the revenue of the busines (from selling its output) and the cost of the inputs that were required to produce the output.

Profit and Loss Account:

The accountant's record of a business's revenue and expenditure during a period. Designed to show the profit (or loss) that the business made in that period, it is known in the United States as the income statement.

Profit Centre:

A business unit that prepares its own profit and loss account, recording the theoretical prices at which it buys inputs from other parts of the business, and the theoretical prices at which it sells its output to other parts of the business.

Profit Sharing:

A way of allowing employees to share in the profit of the organization for which they work. Devising profit-sharing schemes in such a way that everyone feels they are fair has proved to be extremely difficult.


The ability of a particular business, product or process to make a profit. There is no single satisfactory measure of a company's profitability. Proxies include the gross profit margin, the earnings per share and the return on total assets.

Pro Forma:

A presentation of financial or accounting figures based on a theoretical future occurrence. For instance, a pro-forma set of accounts might be produced to show what would happen to their accounts if two companies were to merge. A pro-forma invoices indicates the liability that will arise if an order is made or if certain goods are shipped. In practice, pro-forma invoices are often issued simply because customs and excise require little relation to what the customer is actually going to pay for the goods.

Professional Corporation (U.S.):

Professional corporationsare formed under the professional corporation laws of the state and are limited to professionals, such as doctors, dentists, lawyers, architects, engineers, and accountants. Professional corporation statutes designate which professionals may incorporate under these statutes. Professional corporation shareholders remain personally liable to their clients for professional malpractice.


A set of instructions which enable a computer to carry out particular actions. A word-processing program, for example, enables its user to type letters and data.

Project Finance:

A way of financing big capital projects, such as hydroelectric schemes or toll roads, that depends primarily on the future cash flow of the project for its return.

Promissory Note:

A legally binding promise by one party to another that a certain payment will be made on a prescribed date in the future. Often referred to simply as a note.


A promoter, in a corporation context, is one who generates interest and activity in and on behalf of a corporation before its formation. A promoter is usually personally liable for all preincorporation activities.


There are two business-related meanings:
  1. The elevation of an an employee to a more senior position.
  2. The concentration of exceptional marketing effort on a particular product or service.

Proof of Funds (POF):

A document by which the principal's bank states that the principal owns the funds required for the transaction. Usually, proof of funds can also be delivered in the form of a recent bank-, security- or custody statement.

Proper Law:

The body of law which governs the validity and interpretation of a contract or trust deed.


A right that endures for some time for a special reason; for example, a right to manufacture a new invention which is protected for a while by a patent. Proprietary medicines are pharmaceuticals which are manufactured by only one company and protected from competition by patent.


A document outlining a company's plans for issuing new securities, including what it intends to do with the money that it raises from the issue. In many countries the contents of prospectuses are laid down by law and are designed to protect investors from misleading information.


The erecting of trade barriers to shelter a domestic market from overseas competition.


An individual appointed by the settler of a trust to ensure that the trustee(s) administers and manages the trust assets in accordance with the trust deed and he is often vested with the power to appoint and remove trustees.


An established method of exchanging data over the Internet.


A wealthy private party buying guarantees from theissuing banks, reselling them thorugh banks/brokers. Other designation: commitment holder.


Money put aside by a business out of current profit to meet future liabilities. Specific provisions are set aside against liabilities that can be forecast with a degree of certainty. General provisions are set aside against unexpected liabilities.


A proxy is a written authorization to vote on behalf of another. Shareholders often vote by proxy, permitting others to vite their shares. Except for close corporations (U.S.), directors may never vote by proxy. Proxies are usually revocable, but they can be made irrevocable under certain circumstances.

Proxy Fight:

A struggle between two sets of opposing shareholders to collect the proxies of other shareholders in order to pass a resolution at a company meeting, for example, a resolution that their candidate be elected to the board.

Psychometric Testing:

The use of tests which claim to measure characteristics of an individual's personality in order to ascertain whether that individual is suitable for a particular job. It includes the use of graphology. PT ‑ The Perpetual Traveler A PT by definition, is a non‑conformist in a highly regulated, highly taxed, first world society. In a nutshell, a PT merely arranges his or her paperwork in such a way that all governments consider him a tourist. A person who is just "Passing Through". The advantage is that being thought of by government officials as a person who is merely "Parked Temporarily", a PT is not subjected to taxes, military service, lawsuits, or persecution for partaking in innocent but forbidden pursuits or pleasures. Unlike most citizens or subjects, the PT will not be persecuted for his beliefs or lack of them. PT stands for many things: a PT can be a "Prior Taxpayer", "Perpetual Tourist", "Practically Transparent", "Privacy Trained", or "Permanent Traveler" if he or she wants to be. The individual who is a PT can stay in one place most of the time. Or all of the time. PT is a concept, a way of life, a way of perceiving the universe and your place in it. One can be a full‑time PT or a part‑time PT. Some may not want to break out all at once, or become a PT at all. They just want to be aware of the possibilities, and be prepared to modify their lifestyle in the event of a crisis. Knowledge will make you sort of a PT. A "Possibility Thinker" who is "Prepared Thoroughly" for the future.

Public Bank:

A commercial or savings bank licensed to carry on the business of banking and in some instances other activities related to financial or funding services.

Public Company:

A company whose shares can be bought and sold by the public (usually on a recognized stock exchange). The opposite of a private company. Also known as a publicly held company, but not to be confused with a publicly owned company, which is a company that is owned by a government. To confuse matters further, when a publicly owned company is privatised it becomes a public company.

Public File:

A file held at the Company Register of the jurisdiction concerned, usually maintained at a Government agency and available to the public for review.

Public Offer:

A new issue of securities that is offered to the general public.

Public Relations:

The job of communicating an organizations's point of view to a number of different audiences; for example, the press, customers and the government. The more specific job of communicating with investors is called investor relations.


In general, the attention of the public. Something that companies seek to gain for their new products or for their good behaviour (vis-à-vis the environment, for example). In French, publicité means advertising.

Pump Priming:

A one-off course of action designed to act as a catalyst for a broader economic consequence. Once a pump has been primed it should run by itself thereafter.

Purchase Order:

A detailed written request to a supplier for the delivery of goods or services at a specific price. Once the supplier accepts the terms, the order becomes a legally binding document.

Purchasing Power:

The capacity of consumers to purchase goods and services, itself a function of the taxes that they pay, their propensity to save, and thir morale.

Purchasing Power Parity:

The exchange rate between two currencies based on a comparison of how much it takes in each currency to buy an identical basket of consumer goods. Commonly abbreviated to PPP.

Purpose Trust:

A trust created for a specific purpose without any individually ascertained or ascertainable beneficiaries. A purpose trust is often used where it is intended to be philanthropic in nature. For example, perhaps the grantor might want the trust to benefit genetic research that seeks a cure for Parkinson's disease.

Put Option:

An option to sell a fixed number of securities at a specified price within a specified period of time.

Pyramid Selling:

A method of selling products through layers and layers of agents who are structured like a pyramid. The top layer of agents sells to the next layer and so on. The last layer gets to sell to the general public. In practice, the last layer more frequently gets left with a load of unsellable stuff.



Qualified Accounts:

A set of accounts to which auditors have added a qualification saying that for one reason or another they are unable to verify all the figures. The reason may be that the company is involved in a longrunning and still unresolved lawsuit, or that it is unable to verify the existence of inventory in a faraway place.

Qualitative Research:

Market research designed to gain unquantifiable insights into consumer's attitudes and perceptions. It relies heavily on group discussions and in-depth interviews.

Quality Management:

A system developed in Japan after the second world war in which companies aim to improve the quality of everything they do, marginally but coninuously. Well expressed in a saying from the Middle East: "Drop by drop we make a lake."

Quality Circle:

A group of employees who get together to consider the quality of their work and how they can improve it. Quality circles rely heavily on charting measurable elements of performance and then rewarding any improvement in those elements.

Quality Control:

The systematic checking of samples of mass-produced goods at various stages in the production process, but particularly just before the goods are dispatched to the shops. Sometimes abbreviated to QC.

Quantitative Research:

Market research that attempts to obtain quantitative findings about a sample of consumers, usually expressed as a percentage: for example, 75% of the sample said that they ate Gozo for breakfast.

Quarter Day:

The traditional days on which quarterly payments (of rent, and so on) are paid. These vary from country to country.

Quarter Ratio:

The ratio of a company's current assets (cash, bank accounts, accounts payable) to its current liabilities. The quick ratio gives a rough idea of how well a company could cope with a liquidity crisis.


A quorum is usually at least half of the directors or the holders of at least half of a coporation's issued and outstanding stock. Before directors or shareholders can authorize any action, a quorum must be present. The bylaws prescribe quorum requirements.


A predetermined amount, particularly of goods that are allowed to cross trade barriers. For example, a country may set a quota for the number of foreign cars that it is prepared to allow across its borders in any one year.


There are two business-related meanings:
  1. A price that a supplier "quotes" for the (future) delivery of goods or services.
  2. What a company gets when it becomes quoted on a stock exchange – the price at which buyers and sellers are prepared to deal in its shares.

Quoted Company:

A company whose share price is quoted on a recognized stock exchange.




Short for research and development, the work that a company does (and the department that does it) to come up with new products and with new ways of developing existing products.

Racial Discrimination:

Discrimination between people on the basis of their race. In most countries racial discrimination in the workplace is illegal.


A resurgence of prices (particular of share prices) after a period in which they have been depressed.

Random Sample:

A sample of a population chosen so that (in mathematical theory, at least) every member of that population has an equal chance of being chosen. It is important that samples are random when companies are test-marketing new products or doing quantitative research.

Rate of Interest:

The price paid for the use of money over time. This takes into account the rate of inflation in an economy, the demand for money in the economy, and the degree of risk to the lender.

Rate of Return:

The rate at which factors of production (land, labour or capital) produce a return. In analyzing a company's performance (and comparing it with others) various rates of return on total assets, the rate of return on equity and the rate of return on capital employed.


The classifying of the characteristics of something according to a scale. It might be a film's suitability for children, a company's respect for the environment, or the chances of a debt being repaid.


The allocation of scarce goods or services by a method other than price. Rationing can be done on a first-come, first-served basis, as when people queue for tickets to an immensely popular concert. Or, as in wartime, it can be done with coupons entitling the holder to a certain amount of goods, and no more. One of the most problematic areas of rationing today is in the provision of health services. How do you decided who is to have their hip replaced next?

Raw Materials:

The most basic inputs of a manufacturing process. In many cases these are materials taken from the ground, through mining or agriculture. For steelmaking for example, the raw material include iron; for carmaking the raw materials include steel.

Ready-Made Company:

See Shelf Company.


Corrected for inflation. The real price is rarely the same as the nominal price.

Real Estate:

A North American expression for land and everything that is attached to it.

Withholding and other taxes are frequently imposed on rental income deriving from the holding of real estate in a foreign country; similarly, capital gains taxes may be imposed on the profits flowing from the sale of property. However, in exceptional cases, the provisions of a tax treaty may be of considerable value in minimizing the total tax burden, e.g. the treaty between the Netherlands Antilles and the United States.

Ownership of real estate by individuals may also result in liability to death duties and similar taxes in the country in which the real estate is situated, irrespective of the residence or domicile of the individual owner. For this reason it is common to hold foreign real estate through a tax haven or other company.

Real Time:

Occuring in the present, with special reference to computer systems that take little or no time to perform computations; that is, they carry out instructions almost instantaneously. Really useful in fighter planes.


There are two meanings: - A call by a manufacturer for all the products purchased at a particular time to be returned (and a refund to be paid). Most frequently used when a product is discovered to be faulty.


A major reorganization of the structure of a company's capital, involving, for example, the exchange of shares for loans (or vice versa).


A written acknowledgement of payment received for goods or services.

Receivable: Money that has not yet been received by a business for bills that it has delivered to its customers.


Somebody appointed by a court to "receive" a shaky company's assets on behalf of the company's creditors. Receivers either attempt to help the company to trade itself back into good health, or they liquidate it.


An economy is technically said to be in recession when its GDP has fallen for at least two three month periods in succession. More generally, a recession is a prolonged period of exceptionally slow economic growth.


The granting of favours to A by B in return for the same favours being granted to B by A. A common principle underlying countries' negotiations over trade and tax issues.

Recommended retail price:

A price which manufacturers recommend that retailers should charge consumers for their products. When recommended retail prices become compulsory they can constitute a restrictive practice. As such, they are illegal in many countries.


The process of identifying and choosing new employees. Sepcialist recruitment agencies are often called upon to assist in the process.


There are two meanings:
  1. To reuse industrial and commercial waste as the raw material for a new industrial process; for example, to use waste paper in manufacturing pulp.
  2. The process whereby banks take in surplus savings in one part of the world and invest them in other places where there is a shortage.

Red Clause:

A clause typed in red on a letter of credit to indicate that an exporter can receive all the amount due on the letter of credit in advance of shipping the goods. Red clause originated in the Australian wool trade.

Red Ink:

A loss. Red ink used to be used by accountants to indicate that a figure was negative.


Relating to the time when a financial asset matures, as in redemption date or redemption yield.

Re-domiciliation Corporations:

Some offshore jurisdictions allow corporations incorporated in other jurisdictions to reincorporate in their own at will.


The loss of a job through no fault of the employer. The job is redundant, (that is, no longer needed) not the employee. Employees who are made redundant are often legally entitled to extra payment as compensation for losing their jobs.


A radical redesign of a manufacturing process.


A written statement testifying to the character of someone known to the writer. References are often requested by potential employers from job candidates.


To refund an existing debt; borrowing elsewhere to meet a current financial obligation.


To repay to a consumer the price of goods that have been purchased upon the return of the goods and/or the presentation of evidence that they were faulty.

Registered Agent:

A registered agent is the person or entity designated in the articles of incorporation to receive service of process and other important notices from the state. A corporation must maintain a registered agent at all times or risk forfeiture of the corporate charter.

Registered Company:

A company that is registered with the authorities of the country in which it is established. In most countries it is illegal to operate as a company without being registered.

Registered Office:

The registered office is the place where the registered agent can be found. It may be the corporate office, or it may be the office of the corporation's attorney.

Registered Share:

Share, which is transferred by an instrument of transfer. The name of the holder is registered in the books of the company.


The administering of the laws and government rules imposed upon business.


The person in charge of an agency (or government department) that has been set up for the purpose of regulating a particular industry or market.


The person in charge of an agency (or government department) that has been set up for the purpose of regulating a particular industry or market.


The practice among insurance companies of redistributing risk between them. An insurance company that agrees to insure, say, an oil rig may then buy some reinsurance from anoher insurer in order to share the risk of the rig sinking.


Reinvoicing is the establishment of an offshore corporation to act as an intermediary between a supplier of goods or services and customers or clients. The intermediary, for example, pays the supplier US$1,000.00 for the product and sells it to the ultimate buyer for US$1,500.00. The profit that is retained offshore, which is the result of the reinvoicing transaction, is US$500.00.

Related Person:

Any person who controls a foreign corporation and any corporation which is controlled by, or under common "control" with, that entity. "Control" is defined as the ownership of a majority of the voting power.


The business of moving elsewhere. This can be the moving elsewhere of a whole company, or the moving elsewhere of a whole company, or the moving elsewhere of the individuals who work for it.


The sending of money from one person to another, particularly associated with the cross-border payments made by immigrant communities in Europe and North America to the families that they left behind.


The subcommittee of a company's board which negotiates and decides on the remuneration of the most senior executives of the company, in particular of the managing director and the other executive directors on the board.

Remuneration Committee:

The subcommitee of a company's board which negotiates and decides on the remuneration of the most neior executives of the company, in particular of the managing director and the other executive directors on the board.


Money paid for the use of real estate over time.

Rent Control:

Government-imposed rules on the amount of rent that can be charged, designed either to control ruthless landlords or to influence the movement of tenants (for example, out of inner-city areas).

Rent-free Period:

A period of time in which a tenant is allowed to occupy premises without paying rent. Often granted as part of a package to entice a particularly desirable tenant into a new development.

Replacement Cost: The cost today of replacing a waiting asset. Replacement cost accounting attempts to inject these costs into a company's book.

Replacement Demand:

The demand for a product which arises from consumers wanting to replace old models with new ones. The replacement demand for detergent is high, for cars it is low (and becoming even lower) and for mink coats it is virtually non-existent.


Changing consumers' perception of a product or service by altering its packaging or the way in which it is sold.


To alter the maturity of a borrower's debts (with the agreement of both the borrower and the lender) in order to facilitate the borrower's chances of repaying on time. Formally putting off until tomorrow what cannot be paid today.


Surplus funds that an organization retains for itself and does not distribute to shareholder. Countries also hold reserves. The foreign currency, gold and facilities with international organizations such as the IMF that they can use if and when they need to intervene in the foreign-exchange markets to stabilize their currencies.


The place where an individual or a company is said (by a national tax authority) to reside for the purposes of taxation.

Resident Company:

A bank, trust company, or holding company permitted to deal only in local currency. Any transactions in foreign currency must be approved by the local regulatory authorities. If your business (or proposed business) is international in scope, this kind of restriction could be a major impediment to corporate efficiency. The company is treated by the jurisdiction in which it is incorporated or in which it conducts commercial activities as resident for tax purposes or exchange control purposes or both.


The formal ending by an employee of a contract of employment.


A resolution is a formal statement of any decision which has been voted upon. When the board of directors or shareholders authorize a particular action, the authorization most often comes in the form of a corporate resolution. For example, a corporate resolution could read: "Resolved, that this corporation establish a depositary account with the XXX Bank."


The input available to a business; in particular, the factors of production (land, labour and capital), but also more abstract things such as information and advice.

Restraint of Trade:

Any contract that places a restriction on the way a party to the contract trade. For example, an agreement between an ice-cream manufacturer and a retailer to provide the retailer with refrigerators as long as they are stocked only with the manufacturer's own products.

Restrictive Practice:

A business activity that restricts free competition. In free-market economies governments keep an eye out for restrictive practices, and clamp down whenever they find them.


The selling of goods and services to the final consumer.

Retail Outlet:

Any distribution channel that sells goods and services retail: a shop, a mail-order catalogue, or a web site.

Retained Earnings:

That part of a company's net profit which is not distributed as a dividend.


There are two business-related meanings:
  1. To end full-time employment, that is, to retire from work.
  2. To remove the obligation attached to a debt, either by early pament or through some other arrangement.

Retirement Age:

The standard age within a society at which people retire from work. In most developed countries this is between 60 and 65. Someone who retires before the retirement age is said to take early retirement.


What comes back to someone who makes use on land, labour and/or capital. The return may be in the form of interest (on a loan) or a harvest (from agricultural land). A company's health can be judged by looking at its return on equity (roe), its return on assets (roa) and its return on sales (ros).


Products which are returned to their supplier by the purchaser to whom the purchase price is refunded. The term is also used to refer to the responses to a direct mail advertising campaign.


The income from any commercial activity. Originally, it was the income of the state from taxes (as in Inland Revenue).

Reverse Takeover:

A takeover in which the company being taken over fights back by taking over the company that is trying to buy it.

Revolving Credit:

A loan which permits the borrower to borrow up to a set limit, again and again. The borrower with a revolving credit can borrow up to its limit, repay some of it, and then borrow up to the limit again.

Revolving Underwriting Facility (RUF):

A note issuance facility of a medium-term commitment which may be used either as a standby facility or as a source of variable rate dollar funding. A RUF usually is structured so that the medium-term committed banks do not expect to fund their commitments during the course of the facility.

Rights Issue:

An issue of shares which gives existing shareholders the right to buy the issue at a favourable price and within a specified period of time. Rights that are not taken up can usually be sold on the open market before they expire. In most markets a public company has to make all new share issues in this way in order to prevent existing shareholders from involuntarily having their holdings diluted.


The chances of losing money. Investors who buy financial instruments such as US government bonds, where the risks of not being repaid are minimal, are said to be risk averse. Some risks can be reduced by hedging, others by taking out insurance cover.

Risk Analysis:

The systematic analysis and measurement of the risk of different investments. There are other types of risk associated with an investment besides the simple one of an inability of the investment to make a return. They include political risk (that a government may compel the borrower to renege on the debt) and foreign-exchange risk (that a debt denominated in another currency may, through turbulence in the foreign-exchange markets, come to e worth much less by the time it is repaid).

Risk Management:

The task of managing the risks that an organization takes in the course of its business. Ways of reducing risk include insurance, hedging and disinvestment.


The development and use of robots to undertake activity formerly done by humans. In the car industry, in particular, robots have taken over many of the manufacturing processes.

Roll Over:

To extend the maturity of a loan beyond its original repayment date. In some cases this may involve replacing an old loan with a new one.

Roll-Up Funds:

Funds which create interest that is not distributed but left in a fund so as to increase its capital value and thus become subject to the usually lower capital gains taxation than to the higher personal income or capital transfer tax rates. Roll-up funds, also known as accumulation funds, have administrative advantages. They eliminate the need to track the reinvestment of dividends while the fund's statements provide the investor with an immediate indication of return on the initial investment by a comparison of present price with starting price. Some roll-up funds are structured as unit trusts.


A ship where vehicles roll on and then roll off; that is, the vehicles are driven down ramps and straight into the hold of the boat, and likewise in reverse when disembarking.


A set of negotiations under the terms of the gatt, such as the Tokyo Round or the Uruguay Round. The purpose of these rounds is to get the member countries to agree to reduce even further the barriers to trade between them.


All amounts received for the privilege of using intangibles such as patents, copyrights, secret processes and formulae, as well as amounts received for the privilege of exploiting mineral, oil and gas deposits.


An unusually intense demand by customers for the same thing at the same time. For example, a run on a bank is a simultaneous demand by the bank's depositors to withdraw their money. Other runs, such as the run on turkeys just before Christmas, are less worrying (and more predictable).