Abandonment Option

a facility that allows an investor to terminate and investment sooner than originally agreed.

Accounting insolvency

where the company’s total liabilities are greater that its total assets. The company is unable to meet its Debts

Accounting earnings

the net income of an organisation as shown on its income statement.

Accelerated depreciation

a rate of depreciation that is faster than the rate that is usually allowed for in considering the useful life of the asset eg high technology assets where new inventions and innovations are likely to render assets obsolescence when they are quite new

Accounting liquidity

indicates how quickly a company’s assets could be converted into cash

Act of God

an event caused by natural forces that cannot be predicted. Floods and lighting are acts of God(Insure these goods)

Age Analysis

summary analysis of how long outstanding debts is classified

Analyst in finance

Person working in financial institution, studying the performance of clients, all application will go through our credit analyst

Annual financial statements

the annual record of the company financial position

Arm’s length (of a price or transaction)

indicating that willing buyer and seller are free agents

A Share

ordinary shares in a company that usually do not confer voting rights on their owners.


an article or property that is owned by a company or individual that has a monetary value.


a professional accountant who is trained to conduct an independent assessment of the accuracy and fairness of a company’s financial statements

Auditors report

the section of an annual report in which the auditor comment on the company’s financial statement.


Back Office

where the clerical work, accounting and recordkeeping is undertaken in financial institutions.

Bad debt

an amount of money owed that is considered unlikely to be repaid.

Balance sheet

accounting statement of assets and liabilities on the last day of the trading period.


the state of individuals who are unable to pay their debts and who seem to have no reasonable prospects of doing so and against whom a court bankruptcy order has been issued.

Bankruptcy risk

the possibility that an organisation will not be able to settle its debts.

Bank statement

a statement issues regularly by a bank that records the financial transactions of an individual or company.


slang for million rand


a hypothetical list that identifies people or organisations that are to be avoided for various reasons, such as inability to pay debts

Board of directors

a group of directors responsible for running a company.

Book value

the value of an asset as it is stated in the accounting books of the company.

Bottom line

a term used in accounting to denote NET Profit.


an agent or intermediary who brings together two sides of a contract, such as a buyer and a seller of financial assets.


– a financial statement containing a company’s plans and policies for a specified accounting period.

Business Cycle

the process by which business and economic activities tend to fluctuate up and down in a relatively regular pattern.



the funds that are invested in a business consisting either of share capital, provided by the share –holders or loan capital provided by lenders by way of loan.


a person who purchases and uses goods and services to satisfy his or her needs.


a written agreement in the form of a deed by which a person contract to do something that is then enforceable by law.


a financial facility by which a person or company can borrow money to make purchases without paying for the goods immediately, repayment is usually over and extended agreed term.

Credit rating

an assessment of creditworthiness

Credit risk

the risk that a borrower may default on a loan.


Days of grace

extra time granted for payment of a bill of exchange after the due date.

Debt Collection Agency

An organisation that is responsible for the collection of the outstanding debt

De facto(Latin) “existing in fact’’

something may not be moral, legal or officially recognised, however exist all the same.


failure to carry out the terms of a contract.


any shortfall of cash.

De jure(Latin)

existing according to laws.


the reduction in value of an asset during the course of its operating life.

Discount rate

the interest rate at which future cash flows are discounted to the present value.

Disposable income

the income an individual have after all normal deductions for the month.

Due diligence

in business, the reasonable amount of care a individual or institution should take before entering into a transaction.


Finance house

a financial house or institution that specialises in providing credit.

Five C of Credit

Character, Capital, Capacity, Conditions and Collateral


Income Statement

a financial statement that summarizes all revenues and expenses of an enterprise over a specific period.


a written agreement between all parties involved which specifies compensation in the event of losses.

Interest rate

the amount that a borrower is required to pay for a loan. Usually expressed as a percentage.


Judgement lien

a court order that allows a creditor to lay claim to a property to satisfy an unpaid debt.



a legal contract between the owner(Lessor) of an asset to a person or company(Lessee) by which the lessee has a right to use of asset for a specified length of time at an agreed rental fee.


an arrangement whereby asset is sold on the agreement that it is leased back to the original owner.

Line of credit

an agreement between a bank and a customer that establishes the maximum amount of credit that the bank will allow.


the process that brings about the dissolution of a company.


legal action, a lawsuit.

Loan shark

unlicensed and unregulated moneylender that charges extortionate rates of interest.


Net assets

the asset of a company, including fixed assets, and net current assets less current liabilities

Non refundable Deposit

deposit used to minimize the term loan amount and reduce loan amount



a reduction in the value of a fixed asset due to age or technological advances.

Off balance sheet financing

a method of financing one’s assets that it does not appear on the balance sheet of the company.


Prime rate

the rate of interest charged by banks to their best(prime) business customers.


Qualitative analysis

an evaluation that measures factors that are difficult to assess, such as staff morale.


Qualitative analysis

an evaluation that measures factors that are difficult to assess, such as staff morale.

Quantitative analysis

an evaluation that measure factors that is easy to assess, such as production cost.

Quasi- contract

– an obligation that one party is deemed by the court to have to another, although there is no formal contract between the parties.



the process of repaying part of a loan capital of a company by acquiring new loans.


Security deposit

used as security usually for rental agreement incase of default