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Glossary of Credit Management Terms.
Letter A
Acid test ratio:
A term used to measure the short-term ability
of a business to meet its obligations. It is calculated as current
assets, less stocks and work in progress, divided by current liabilities
(also known as Quick
ratio).
Administrative receiver:
Appointed by a creditor under a specific
power arising under the terms of a fixed or floating charge. The
receiver’s duty is to realise the value of the asset charged
for the benefit of his creditor/client. A company can continue to
trade while in receivership but it cannot prevent a petition for
its winding-up being presented to the court. An administrative receiver
must be an insolvency practitioner.
Agent:
A person authorised expressly or by implication
to act for another, called the principal, who is, as a result of
the authority delegated by him, bound by the acts of the agent.
Annual return:
By law, a limited company must each year
draw up an annual summary of its capital and shares, together with
an up-to-date list of directors and members (shareholders) with
their names, addresses and number of shares held, occupation and
other directorships of a director and statement of the indebtedness
of the company in respect of secured charges.
Associated companies:
Companies which by some common link or bond
are considered Associated. The most common occurrence is directorate
associations.
Authorised Capital:
This is the amount of money that can be put
into a Public company in the form of shares. For a Limited or Unlimited
Company this is known as Nominal
capital (the term Registered
capital is also sometimes used.)
Auditors report:
A statement from the auditors (accountants)
that they have examined a business’ books of accounts to check
whether they have been properly kept and whether they represent
a true and fair view of the company’s trading.
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