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RAIDER

An individual or corporate investor who buys into a company with the intent of taking control and installing new management.

RAIN CHECK

A document that is given to a customer by a business for later purchase of merchandise. Sometimes, a business may become temporarily out of stock for an item that has been offered at a discount price. The rain check permits the customer to obtain the discount price during purchase of the item at a later time.

RANK AND FILE

Usually refers to the general overall aggregate of all the ordinary workers in the company. The term originates from the military including those of rank and those who follow.

RATE OF PAY

The usual amount of money that is paid to an employee for a given period worked or for a given amount of output produced regardless of the time taken; expressed in dollars for the period or amount of output.

RATE OF RETURN

The PROFIT or EARNINGS received from an INVESTMENT expressed as a percent. Many other definitions are used for specific applications: RETURN ON EQUITY, RETURN ON INVESTED CAPITAL; YIELD; CURRENT YIELD; YIELD TO MATURITY; DIVIDEND YIELD; INTERNAL RATE OF RETURN.

RATIO

A relationship of one thing to another expressed in numbers, often used in business as a percentage or a multiple.

RATIO ANALYSIS

Comparison of similar items on the basis of percentages rather than in dollars. This method can reveal trends, identify eccentricities and evaluate risks.

RAW MATERIAL

The earliest phase of materials supplied, such as those mined, grown, harvested or distilled. Also refers to the combination of all materials or things needed to produce a given product.

REAL ESTATE

The common term for land, buildings and improvements. In accounting and legal senses, the term REAL PROPERTY is used. See REAL PROPERTY.

REAL ESTATE TAX

By law, a payment made to a government (usually state or local) and calculated as a percentage of the worth of the real property asset (REAL ESTATE) and based on the assessed value as determined by a government assessor.

REAL PROPERTY

Things (PROPERTY) that are tangible but not movable; as opposed to PERSONAL PROPERTY that are tangible but also movable. In accounting, real property refers to land buildings, structures, fixtures and attached improvements. See also PROPERTY; PERSONAL PROPERTY.

REBATE

A refund or return of a stipulated charge as an enticement to consummate the deal. Often a coupon to stimulate sales.

RECAPITALIZE

Alteration of a corporation’s FINANCIAL STRUCTURE by exchanging one type of capital for another type of capital. BANKRUPTCY is a reason for recapitalization to relieve the debt load and avoid insolvency. A healthy company may recapitalize to improve a tax situation, improve credit rating and finance equity expansion in defense against corporate raiders.

RECAPITALIZATION

Alteration of a corporation’s FINANCIAL STRUCTURE by exchanging one type of capital for another type of capital. BANKRUPTCY is a reason for recapitalization to relieve the debt load and avoid insolvency. A healthy company may recapitalize to improve a tax situation, improve credit rating and finance equity expansion in defense against corporate raiders.

RECEIPT

A document that acknowledges payment received. In finance and accounting, the time when money is available for use by the company or the time when a document or product has arrived at the place of business. The piece of paper evidencing the exchange.

RECEIPT BOOK

The original entry accounting document for recording money received.

RECEIPTS

The sum of moneys received during a period.

RECEIVABLE

Anything that is expected to arrive at the business. Particularly in finance and accounting, it is a short form of ACCOUNTS RECEIVABLE.

RECEIVABLES

Anything that is expected to arrive at the business. Particularly in finance and accounting, it is a short form of ACCOUNTS RECEIVABLE.

RECEIVABLES AGING

See ACCOUNTS RECEIVABLE AGING.

RECEIVER

An independent party appointed by a court to receive, preserve and manage a business that is involved in litigation, such as bankruptcy, pending final disposition of the matter before the courts.

RECEIVING

The department or part of a business charged with the material control of all products delivered to the business from suppliers. Also, the act of accepting these products.

RECESSION

A downturn in economic activity; a time generally lacking in prosperity and lacking in growth of business activity. Recession can be global, national, regional, local or even individual, but usually is defined by economists on a national level as two or more successive quarters showing a decline in the GROSS DOMESTIC PRODUCT.

RECONCILE

To perform comparative analyses of two or more accounting sheets to verify accuracy. One of the most common reconciliations in a small business is a comparison of the BANK STATEMENT of checks paid with your own record to provide assurance of the amount of cash in your account at the bank.

RECORD

To put in writing; to store information for retrieval at a later date. Any physical thing that contains information as evidence of something that occurred previously. Records are not limited to paper records.

RECORDKEEPING

The process of maintaining written documentation of events. Recordkeeping encompasses all types of information that must be retained for future reference, whereas BOOKKEEPING specifically means financial records.

RECORD RETENTION

The period of time for which the documents of a company should be saved in the company’s files for future proof of transactions by the company. The length of time to save a particular document varies by the type and value of the document.

RECORDS

The total aggregate volume of documents; all the paperwork and other information about a particular subject.

RECOURSE LOAN

A debt instrument wherein the lender can legally require repayment of a loan from personal funds if the collateral is not sufficient to repay the note. As opposed to a NON-RECOURSE LOAN where the lender can only obtain compensation from the collateral or funds of the business.

REDEMPTION AGREEMENT

A type of BUY-SELL AGREEMENT whereby a corporation buys the stock of a shareholder if the conditions of the buy-sell agreement occur.

RED INK

Losses in the form of unprofitable operations, debts or an excess of liabilities over assets.

RED LINE

An action by a company, bank or other entity to cease financial transactions with another entity.

RED TAPE

A common name applied to procrastination and confusing language that invariably occur in any large organization, particularly in governments through laws and regulations. The lack of clarity and excessive paperwork cause delays in activities.

REFINANCE

To negotiate a change in an existing loan or replace an existing loan with a new loan, most often with conditions more favorable to the borrower, such as revising the payment schedule to reduce monthly payments, modify interest charges, extend the maturity date, increase the amount of debt and retire an existing debt by issuing new securities to reduce the cash flow.

REFINANCE A LOAN

See REFINANCE.

REGISTER

A formal record of important information, often kept by an official appointed to do so; a book in which this informatoin is kept; an entry in such a record. Also, a machine (cash register) used to record retail sales.

REGISTRAR

The agent, usually a bank or trust company, responsible for keeping track of shares of stock and bonds.

REGISTRATION

The formal recording in a REGISTER.

REGULAR HOURS

The normal times a business is in operation and open for customers. Also, the normal work schedule of an individual employee or the number of hours worked during this period. As opposed to OVERTIME HOURS.

REGULATION

A rule of LAW; laws and POLICIES enacted by a government to control actions of citizens and businesses. In the United States’ system of government, laws are enacted to protect citizens against injury. These are promulgated as regulations. Many laws and regulations benefit the small-business person.

REINSURANCE

Sharing the RISK among two or more insurance companies. Part of the primary insurance company’s risk is assumed by back-up companies. Thereby, reinsurance allows an individual company to take on clients whose coverage needs are greater than the individual insurance company’s capacity alone.

REINSURER

An insurance company that assumes part of the risk in exchange for part of the premium, as back-up, to a primary insurer. See REINSURANCE; INSURANCE POOL.

REMANUFACTURE

Rebuilding used equipment using some new parts so that the rebuilt equipment is as functional as new equipment but at less cost. Often remanufactured products are sold to a different customer from the original user. Not the same as repair or reconditioning.

REMIT

To pay for goods or services purchased.

REMITTANCE

The payment for goods or services purchased.

REMITTANCE ADVICE

The document that records payment for goods or services purchased.

REMITTANCE OF PROFIT

The act of transferring profits earned in a foreign country back to one’s home country.

RENT

Money paid by a user (LESSEE) to an owner (LESSOR) of property for use of the property under the terms of a LEASE. Often used interchangeably as a verb with lease; see LEASE.

RENTAL AGREEMENT

A LEASE; the contract defining the conditions by which one person uses the property of another.

RENTER

One who RENTS property of another. Same as LESSEE.

REP

A manufacturer’s representative; a firm that sells the products of one or more producers on a commission basis.

REPAIRS

Restore real or personal property to the original or operating condition; minor alterations are made to maintain use of the item rather than purchase a replacement. Repairs do not extend the life of the property or improve the property.

REPAYMENT RISK

The chance that a borrower will not repay a loan when due. See RISK.

REPAY

To provide money (a payment) as prescribed by a loan agreement.

REPLACEMENT VALUE

The amount of expenditure (the cost) necessary to repurchase a similar item. Often used in insurance, allowing purchase of new items for existing items that may be lost due to a covered event.

REPOSSESS

To take back an asset by a lender from a buyer who has failed to make payments when due.

REPURCHASE AGREEMENT

A clause in a CONTRACT or an AGREEMENT that states the conditions under which the original seller may recover title to (repurchase) the item that was sold, i.e., frequently a death but also after a specific event or an elapsed time.

REQUEST FOR PROPOSAL (RFP)

A request by a buyer for a PROPOSAL (BID) from a seller to perform work or provide a service; an announcement of the desire to engage in contract work. The buyer furnishes complete plans and specifications for the desired work; the seller often provides further definition and states a price to perform the work specified. Usually, a request for proposal involves work or service where the provider must perform some amount of design or definition toward the end result in the process of accomplishing the work. See also PROPOSAL; INVITATION TO BID; REQUEST FOR QUOTATION.

REQUEST FOR QUOTATION (RFQ)

A request by a buyer for a QUOTE from a seller to perform work or provide a service. Usually, a request for quotation is for a specific article or task of known characteristics, description and quality. See also QUOTATION; INVITATION TO BID; REQUEST FOR PROPOSAL.

REQUISITION

A document internal to the business for obtaining products, supplies and materials. Also, the act of obtaining these items.

RESERVE

Money set aside in the business books for a specific purpose such as purchase of equipment or real estate.

RESERVE FOR BAD DEBTS

An item listed on a BALANCE SHEET as a subtraction that anticipates some of the ACCOUNTS RECEIVABLE may not be collectible.

RESOURCES

In business, the individual elements that are important to performing the business. Resources can be classified in four major categories; land, labor capital and management. Collectively, these elements, when combined, are the total strength of the business.

RETAIL

The sale of goods or services singly or in small quantities directly to the consumer, or relating thereto. As opposed to WHOLESALE.

RETAILER

A business that deals in retail trade. See RETAIL.

RETAIL PRICE

The amount charged (price) when selling to the general public. As opposed to WHOLESALE PRICE or FACTORY PRICE.

RETAINAGE

A portion or percentage of payments due (PROGRESS PAYMENTS) for work completed on a contract that is held back until the entire job is completed satisfactorily.

RETAINED EARNINGS

NET PROFITS (EARNINGS) kept in the company that accumulates as additional EQUITY in the business after DIVIDENDS are paid to stockholders. Also called EARNED SURPLUS; UNDISTRIBUTED EARNINGS. Retained earnings are distinguished from CONTRIBUTED CAPITAL.

RETAINER

A fee paid in advance to assure services are available when needed, mostly used by professionals such as lawyers, accountants and consultants.

RETIREMENT

Repayment of a debt or obligation. Remove from further service, such as permanent withdrawal of an employee from the workforce; cancellation of a stock or bond; scrapping a fixed asset at the end of its useful life.

RETIREMENT PLAN

Prepaid savings (insurance) provisions accumulated during the working lifetime in preparation for old age.

RETURN

The PROFIT from an investment or profit in relation to another business variable, usually expressed as a percentage rate. See also RATE OF RETURN; RETURN ON EQUITY; RETURN ON INVESTED CAPITAL; RETURN ON SALES. The physical return or exchange of merchandise for CREDIT or REFUND. The form used to report TAXES to a governmental agency; a TAX RETURN.

RETURN ON ASSETS (R.O.A.)

A measure of the efficiency of a business calculated as a percentage; a measure of the percent of profit for each dollar invested in the assets by dividing PROFIT by TOTAL ASSETS. When compared for periods before an expansion of capacity, it is helpful in understanding the increased profit obtained from the expansion.

RETURN ON CAPITAL

Expressed as a percent, cash distribution from the sale of a FIXED ASSET; distribution of cash resulting from DEPRECIATION of tax savings; or any other cash distribution unrelated to RETAINED EARNINGS.

RETURN ON EQUITY

See RETURN ON INVESTED CAPITAL.

RETURN ON INVESTED CAPITAL

A measure of profitability of the ownership of a business expressed as a percentage. This measure is most important to the owner, because it can be compared with other investments. It is calculated by dividing NET PROFIT for the period by TOTAL EQUITY (NET WORTH) at the beginning of an accounting period. Comparison of the current period with other periods reveals trends; comparison with industry composites reveals the profitability of your company compared to competitors. Return on investment (invested capital) is similar to interest on savings.

RETURN ON INVESTMENT (R.O.I.)

A measure of profitability of the ownership of a business expressed as a percentage. This measure is most important to the owner, because it can be compared with other investments. It is calculated by dividing NET PROFIT for the period by TOTAL EQUITY (NET WORTH) at the beginning of an accounting period. Comparison of the current period with other periods reveals trends; comparison with industry composites reveals the profitability of your company compared to competitors. Return on investment (invested capital) is similar to interest on savings.

RETURN ON SALES

A measure of profitability expressed as a percent of SALES; the usual definition of PERCENT PROFIT. The calculation is NET INCOME BEFORE TAXES divided by NET SALES written as a percent. It is a measure of financial efficiency when compared to prior periods or with other companies in the same kind of business, and it varies widely by industry.

RETURNS

The plural of RETURN. See RETURN.

REVENUE

Same as INCOME; SALES. See INCOME.

REVOLVING LINE OF CREDIT

An amount of credit that is readily available to a company from a bank for immediate borrowing as the need arises at a specified interest rate. The company can borrow and repay without credit application for each transaction.

RFP

See REQUEST FOR PROPOSAL.

RFQ

See REQUEST FOR QUOTE.

RIDER

An amendment to an insurance policy. The rider becomes an integral part of the policy and changes the protection.

RISK

The chance (jeopardy) that a financial deal may fail as opposed to achieve the desired gain. The measurable probability of losing value. As a minimum, not gaining value; as a maximum, losing the total invested amount. There are many types of risk and many factors affecting risk. To the small businessperson, the RISK OF PRINCIPAL is the greatest risk faced. Risk of principal is the chance invested capital will be lost or as a minimum, decrease in value. A small business lender faces REPAYMENT RISK, the chance that the borrower will not repay the loan as promised.

RISK CAPITAL

See VENTURE CAPITAL.

RISK OF LOSS

The danger attributed to the possibility a hazardous event will occur causing financial drain; the measurable probability such an event will occur. Insurance may be available to minimize the loss. See RISK.

RISK OF PRINCIPAL

The chance that invested capital will be lost. See RISK.

R.O.A.

An abbreviation for RETURN ON ASSETS.

ROADMAP TO SUCCESS

A business plan; the guidelines that identify potential impediments so they can be overcome to achieve profitability.

ROYALTY

Payment of an agreed amount of money for the right to use a given property, e.g., a patent or copyrighted material.

RULE OF 72

A calculation of the approximate number of years required to double an investment at an interest rate. For example, an interest rate compounded at nine percent would double in eight years (72/9 = 8).

RULE OF THUMB

Unwritten but accepted operating practices that are considered to be average; practical, generally accepted average values for business statistics.

RUNNING A BUSINESS

Same as conducting or operating a business.

 

All definitions were taken from www.small-business-dictionary.org.