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User Guide
Financial Glossary
- APR - Annual Percentage Rate
- Administration
- Amortisation
- Annual Report
- Approving a Sale
- Assurance
- Authorisation Process
- Balance Sheet
- Balloon Payment
- Base Rate
- Benefits
- Bill Of Exchange
- CAGR - Compound Annual Growth Rate
- CAPEX - Capital Expenditure
- CEO - Chief Executive Officer
- CFO - Chief Financial Officer
- CIO - Chief Information Officer
- COO - Chief Operating Officer
- CTO - Chief Technology Office
- Capital
- Capital Goods
- Capital Lease
- Capital Spend
- Cash Burn
- Chairman
- Chapter 11
- Charge
- Chinese Walls
- Churn
- Cockroach Effect
- Contract Hire
- Cost Of Capital
- Cost Savings
- Covenant
- Credit Scoring
- Credit Search
- Creditors
- Cross Charging
- DCF - Discounted Cash Flow Analysis
- DSO
- Debentures
- Debtors
- Depreciation
- Directors' Report
- Discount Rate (pa%)
- Dividend
- Dividend Yield
- EBITDA
- EPS - Earnings Per Share
- EVA %
- EVA - Economic Value Add
- Earnings
- Efficiency Improvements
- Ego
- Endorsement
- Equity
- Equity Rental
- Extension Rentals
- FD - Finance Director
- FRS 17
- Factoring
- Finance Lease
- Financial Returns
- Fixed Assets
- Floating Charge
- Forward Multiple
- Fraud Reduction
- Funds Flow Statement
- Gearing
- Goodwill
- Gross Profit Percentage
- Hire Purchase
- Hurdle Rate
- IPO - Initial Public Offering
- IRR - Internal Rate Of Return
- Impairment Charge
- Incoterms
- Infrastructure
- Initial Lease Period
- Insider Trading
- Insolvency
- Intangible Asset
- Inventory
- Investment Appraisal
- LIBOR - London Inter Bank Offered Rate
- Lease Purchase
- Leasing
- Leverage
- Like-for-like
- Liquidation
- Liquidity
- Liquidity Ratio
- Loaded Cost
- Loans
- Loss
- MD - Managing Director
- MMC - Monopolies and Mergers Commission
- Margin
- Marginal Cost
- Mark Up
- Market Capitalisation
- Market Value
- Minimum return (pa%)
- Monthly Costs (averaged)
- Multiple
- NPV - Net Present Value
- Net Asset Value
- Net Asset Value (per share)
- Non-Executive Director
- OPEX
- Off Balance Sheet Financing
- Offshore
- On Balance Sheet
- Operating Lease
- Outright Purchase
- Outsourcing
- Ownership - Risks
- Ownership Rewards
- P/E Ratio
- Payback
- Private Limited Company
- Profit
- Profit and Loss Account
- Prospective Earnings
- Prospectus
- Public Company
- Quoted Company
- ROCE - Return On Capital Employed
- ROI - Return On Investment
- Rate Of Return
- Regulatory Costs
- Renting
- Residual Value
- Results
- Return On Assets (ROA)
- Return On Equity (ROE)
- Return On Investment Capital (ROIC)
- Return On Net Assets (RONA)
- Return On Sales (ROS)
- Revaluation
- Revenue
- Review period
- SLA - Service Level Agreement
- Security
- Share Capital
- Shareholder Value
- Shareprice
- Spend Deferment
- Stock
- Substance Over Form
- Sweating the Assets
- TCO
- Target Price
- Tax Avoidance
- Tax Evasion
- The Market
- Time Is Of The Essence
- Tranche
- VAE - Value Added (Economic)
- VAE%
- Volatility
- WDA - Writing Down Allowance
- Weighted Average Cost Capital (WACC)
- Whole Useful Life
- Window Dressing
- Wooden Dollars
- Working Capital
- Write Downs
International Trade Glossary
Residual Value
Used in leasing and Contract Hire - it’s the forecast of value attributed to the item being rented at the end of the primary lease period. This value ‘risk’ is pre-determined and taken by the supplier or other third party. This arrangement can make the use of the asset for the customer much cheaper than ownership over that same period.
Straight Talk
When a rental/lease or hire agreement is entered into, the provider of the service assumes that the asset being used has a value at the end of the original rental contract period. This is its ‘residual value’. It’s what they think it’s worth when you’ve had enough of it and want it off your driveway or out of your life. Not appropriate for humans.