Glossary

• Abbreviated Accounts
  Sometimes called Modified Accounts, these are Accounts which do not disclose full Profit and Loss information, as the company concerned is exempt from having to do so under the Companies Act. Generally speaking, exemptions are based on the size of the company. Small and Medium-Sized Companies defined as such by the Companies Act qualify for varying degrees of exemptions, although such companies may still volunteer to file full Accounts. Accounts are available on our service by either email or fax to both account holders and single users and can be requested online using either name or registered number. For detailed information on Companies House documents please see the 'Service and Prices' page accessible from the menu bar above
  
  
• Accounting Reference Date
  The Accounting Reference Date (ARD) is the Financial Year-end. It is the date that determines when Accounts are due for delivery to Companies House and, for all new companies, is set as the first anniversary of the last day of the month in which the company was incorporated. For example, if the company was incorporated on 24 July 2005, its Accounting Reference Date would be set at 31 July 2006 (i.e. in the following year) - or up to seven days either side of that date. The first Accounts would cover the period between these two dates. The ARD may be changed if a company chooses to extend or shorten its Accounting Period.
  
  
• Accounting Reference Period
  See Accounting Period
  
  
• Accounting Period
  Every company must prepare annual Accounts that report on the performance and activities of the company during the year. The Accounting Period (also more precisely known as the Accounting Reference Period, or as the Financial Year) is the period reported on. The Accounting Period starts on the day after the preceding Accounting Period ended, or, in the case of a new company, on the day of its incorporation. It ends on the official Accounts due date (or Financial Year-end) which will appear in the Balance Sheet on our Basic and Standard Reports for every year for which a company has so far filed Accounts. A company can file Accounts as often as it wishes, although the usual length of the Accounting Period is 12 months. However, a company (whether Private Limited or PLC) can apply to extend this 12-month Accounting Period by a further 6 months, allowing a maximum of an 18-month Accounting Period.
  
  
• Accounts
  UK Limited Companies are required to file their Accounts at Companies House for public record. Non-Limited businesses (Sole Traders and Partnerships) are not required to disclose their Accounts at Companies House or elsewhere for public record. Accounts are available on our service by either email or fax to both account holders and single users and can be requested online using either name or registered number. For detailed information on Companies House documents please see the 'Service and Prices' page accessible from the menu bar above.
  
  
• Accounts on Cash
  Also known as Pro Forma Terms, these are the Accounts of customers who do not receive credit terms, as they pay in advance of delivery or production of goods.
  
  
• Accounts Filing Period
  The Accounts Filing Period immediately follows the period to which the Accounts refer (i.e. the Accounting Period), being the time allowed for a Limited Company to prepare and approve their Accounts before they file them for public record at Companies House. Therefore together these two periods make up the total possible time which can elapse between subsequent years' Accounts being filed. The Accounts Filing Period will be a maximimum of 10 months for Private Limited Companies and 7 months for Public Limited Companies. For example, a Private Limited Company with a December Year-end has to file its Accounts by the end of the following October. Note that a company can elect to extend the Accounting Period for up to 18 months (12 months is the usual length of the Accounting Period). Consequently a new company can (and often does) wait for up to the maximum 28 months (i.e. 18 + 10 for Private Limited companies) or 25 months (i.e. 18 + 7 for PLCs) from the date of its incorporation, before filing its first set of Accounts.  
  
  
• Accounts Placed for Collection
  Accounts which have been be placed in the hands of a third party, for example a solicitor or a debt collection agency, in order to obtain payment for monies which have become overdue.
  
  
• Accruals/Deferred Income (Current Liability)
  The amount of money received by the company, or to which the company is due, for work that has yet to be completed. When the income is categorised as a Current Liability, the work is due for completion within 12 months.
  
  
• Accruals/Deferred Income (Long-Term Liability)
  The amount of money received by the company, or to which the company is due, but has yet to be earned. When the income is categorised as a Long-Term Liability, the provision of goods and/or services will occur more than 1 year after the Balance Sheet date.
  
  
• Acid Test
  A ratio used to measure a company's Liquidity. It is calculated as the sum of Debtors plus Cash divided by total Current Liabilities.
  
  
• Annual Return
  A document submitted to Companies House every 12 months which confirms the Registered Office Address of the company, the names and addresses of the Directors and Company Secretary, and the Shareholders. The Annual Return is available on our service by either email or fax to both account holders and single users and can be requested online using either name or registered number. For detailed information on the Companies House documents we provide please see our 'Service and Prices' page accessible from the menu bar above.     
  
  
• Audit
  An Audit is the inspection of a company's accounts by a qualified accountant to determine whether the accounts reflect the true state of the company's affairs.
  
  
• Auditors' Remuneration
  The total amount of money paid to the auditors during the Financial Year to cover payment for their services during that year.
  
  
• Authorised Capital
  The total amount of Share Capital that a company is allowed to issue.
  
  
• Average Remuneration
  This is the Total Employees' Remuneration (annualised where necessary) divided by the average number of full-time plus part-time workers employed by the business.
  
  
• Balance Sheet
  This is an analysis of a company's assets and liabilities at a given date.
  
  
• Bank Overdraft
  The value of the company's overdraft with the bank at the Balance Sheet date.
  
  
• Bankruptcy
  Bankruptcy occurs when an individual is not only unable to pay debts as and when they become due, but has made it clear that they do not expect to be able to pay their debts in full.
  
  
• Borrowing Ratio
  A Ratio used to measure a company's Solvency. Total Loans (i.e. Total Debt) divided by Net Worth (i.e. Shareholders Funds less Goodwill) expressed as a percentage.
  
  
• Capital Employed
  The aggregate year end value of capital used in running the business. This figure can be arrived at by deducting Current Liabilities from the sum of both Fixed Assets and Current Assets.
  
  
• Capital Employed/Employees
  Capital Employed divided by the average number of full-time and part-time workers employed by the business during the financial year.
  
  
• Cash at Bank
  The total amount of cash held by the company at the Balance Sheet date.
  
  
• Cash Flow
  The movement of cash into and out of a company. The relationship between the flow of money into the business and that flowing out will determine its Liquidity.
  
  
• Certificate of Incorporation
  The Certificate issued by Companies House indicating the date at which the business was incorporated and acquired Limited Liability status.
  
  
• CCJ (County Court Judgment)
  A debt for which the subject has been found liable by a county court, and which then remained unpaid 30 days after the judgment. If payment is made within 30 days of judgment no CCJ is recorded.
  
  
• Charities
  Certain companies, according to their legal status, file only limited information at Companies House. For further information on Charities contact the relevant authority on +44 (0) 845 300 0218 or visit their website at charity-commission.gov.uk See also Industrial and Provident Societies.
  
  
• Charge
  This is a loan made to a company, and is often secured against some assets.
  
  
• Companies House
  The central registry administrated by the UK Government Department of Trade and Industry. All UK Limited Companies are required to file certain statutory information with Companies House. The information filed at Companies House is made available for public record (i.e. open to public access). Amongst the information which is required to be filed are Accounts and Annual Returns.
  
  
• Company Secretary
  This the person who keeps the company's statutory books, for example the minutes of meetings and details of the share register. Other duties can involve general administration of a company's affairs.
  
  
• Consumer Credit File
  Our Consumer Reports are based on the data held on individuals resident in the UK. However, in accordance with the Data Protection Act, we are unable to provide you with information on your own personal credit file. For more information please see our main Help & FAQ.
  
  
• Consumer Credit Licence
  The Licence is issued for various categories of use; Category A is consumer credit financed from own resources, Category B is consumer hire, Category C is credit brokerage, Category D is debt adjusting and counselling, Category E is debt collecting, Category F is credit reference agency, Category Z is canvassing off trade premises.
  
  
• Consumer Data
  Our Consumer reports reflect the information held on the subject's Credit File with a credit reference agency. The report will show what information, if any, is on the credit reference agency file for the person concerned, at the particular address provided. The data allowed to be held on private individuals is regulated by the Data Protection Act. Please do not try to search yourself using our service as it may affect your Credit File. Every search carried out against a person leaves a record of the search on their File, and each search infers that the person has applied for credit or given cause for a lender to search their File. Another reason for not searching yourself using our service is that you will not be seeing your original Credit File. If you wish to dispute or amend any information on your own File you will still need to go through the proper procedure which requires you to start by obtaining your Files direct from the agencies that hold them. For more information please see our main Help & FAQ.
  
  
• Consumer Credit Ratings
  Credit reference agency files do not hold credit ratings on people. It is lenders who calculate what they consider to be an acceptable credit risk based on the information presented, and any other information they have about the subject.
  
  
• Corporation Tax (Balance Sheet)
  The total amount of money set aside to cover corporation tax charges payable within 12 months from the Balance Sheet date.
  
  
• Cost of Sales
  The total amount of direct costs involved in generating business. Where this figure cannot be obtained, it may form part of Total Expenses.
  
  
• County Court Judgment (CCJ)
  A debt for which the subject has been found liable by a county court, and which then remained unpaid 30 days after the judgment. If payment is made within 30 days of judgment no CCJ is recorded.
  
  
• Creditor
  Someone to whom money is owed. On a Balance Sheet this represents amounts owed by the company, usually to suppliers.
  
  
• Credit Period (Days)
  An estimation of how long (in days) a company is taking to collect money it is owed by its customers. It is a measure of the liquidity of a company, and is calculated as the amount 'Trade Debtors' divided by Turnover multiplied by 365. Where the trading period is greater than or less than 52 weeks, the Turnover figure will be annualised. For more information please see our main Help & FAQ.
  
  
• Credit Rating
  The Credit Rating and Risk Indicator scores are both created by applying statistically proven scoring models to the data held about a business. For more information please see our main Help & FAQ.
  
  
• Current Ratio
  This ratio, sometimes known as the Liquidity Ratio, measures the degree to which a company has the ability to meet day to day commitments. It is calculated as Current Assets divided by Current Liabilities. Credit Reference Agencies sometimes reduce ratings if the current ratio falls above 5. For more information please see our main Help & FAQ.
  
  
• Currency
  Most registered British companies file accounts in £sterling. However, certain companies (e.g. subsidiaries of overseas parents) may file their accounts in other currencies. This indicator shows the currency denomination employed by the company. Also, for larger British companies, the denomination may indicate £000s and this highlights the fact that the figures are displayed in thousands of pounds in order to reduce the amount of data on the screen.
  
  
• Data Controller
  This is an individual or an organisation who processes personal information. For example, an individual or business who obtains one of our Consumer Reports is a Data Controller. Under the Data Protection Act, all Data Controllers, unless they are exempt, must notify the Information Commissioner. Their details including a description of the nature of the processing, and their identifying Data Protection registration number will appear on the Data Protection Register.
  
  
• Data Protection Register
  This is an official list of individuals and organisations who process personal data and who have notified the Information Commissioner of their activity in this regard. This list will include those who currently obtain our Consumer Reports.
  
  
• Data Protection Registration
  This is also called 'Data Protection Licence' or 'Data Protection Entry'. Individuals and organisations who intend to process personal information (including those who wish to obtain our Consumer Reports) must notify the Information Commissioner and be registered as a data controller. For more information please see our main Help & FAQ.
  
  
• Data Protection Registration Number
  This is the identifying number which you will have as a data controller once you are registered either as an individual or as an organisation who intends to process personal information. You will need to provide us with your Data Protection Registration Number in order to obtain our Consumer Reports. For more information please see our main Help & FAQ.
  
  
• Date of Accounts
  This refers to the date of the company's financial year end.
  
  
• Date of Incorporation
  The day Companies House registers the business as a Limited company. All business conducted from that date is as a Limited company and affords the owners Limited Liability.
  
  
• DBT (Days Beyond Terms)
  The number of days on average that a company pays its invoices after payment has become due. For example, a company with a DBT of 15 is paying 'net 30 day' accounts after 45 days and 'net 60 day' accounts after 75 days. Differing types of payment terms are taken into account as all calculations are taken from when invoices become due for payment. A DBT figure of '0' indicates that our sources have experienced payment made within terms.
  
  
• Debenture
  A loan usually secured by the general credit worthiness of the company rather than any specific item.
  
  
• Debt Gearing (%)
  This is a measure of solvency. It describes the 'gearing' of a business by comparing loans to Net Worth (i.e. Shareholders Funds less Goodwill). It is calculated as Long-term Debt (or Long-term Debt plus Short-term Debt) divided by Net Worth, and is expressed as a percentage figure. (The calculation including Short-term Debt is known as the 'Borrowing Ratio'). For more information please see our main Help & FAQ.
  
  
• Debtors
  Amounts owed to the company, usually owed by customers who have been invoiced but who have not yet paid.
  
  
• Deferred Taxation
  The aggregate amount of deferred taxation provided for at the Balance Sheet Date.
  
  
• Depreciation
  The aggregate amount of money set aside from annual profits to cover the decrease in value of company assets through either wear and tear or obsolescence.
  
  
• Director
  A person who manages the company on behalf of the Shareholders. In smaller companies the Directors and Shareholders may be the same people. Every company must have at least one Director. The Secretary may be a Director but not the sole Director. Our basic and standard Limited Company reports both contain the names of the directors of the company concerned, the standard report also containing the home address(es) of the director(s). We also supply two kinds of reports specifically on directors, one a report on an individual director, the other a report on the directors of a specified company. For detailed information on these reports please see the 'Service and Prices' page accessible from the menu bar above.
  
  
• Directors Disqualification
  In circumstances specified in section 296 to 300 of the Companies Act a person may be disqualified, without leave of the Court, from holding office as a Director.
  
  
• Directors Loans (Current Assets)
  Short-term debt owed to the company by its Directors at the financial year end.
  
  
• Directors Loans (Current Liability)
  The total amount of short-term debt (less than 1 year) owed by the company to its Directors at the Balance Sheet date.
  
  
• Directors Loans (Long-Term Liability)
  The total amount of Long-term debt (i.e. more than 1 year) owed by the company to its Directors at the Balance Sheet date.
  
  
• Directors Remuneration
  The aggregate amount of money paid to Directors during the course of the trading period.
  
  
• Discontinued Operations
  Profits or losses generated from activities that have either been sold off or wound up. The figure represents the amount applicable to the period whilst the activity was still generating revenue toward the group total.
  
  
• Dissolution
  When a company is struck off the Companies Register it ceases to exist and is dissolved. The company will be dissolved when the Registrar publishes a notice to that effect in the London Gazette.
  
  
• Dissolved Company
  Companies House can Dissolve a company for various reasons, for example when a company persistently fails to submit statutory documents, such as Accounts and Annual Returns. However, to ascertain the reasons in the case of a specific company you can contact Companies House directly.
  
  
• Dividends
  The total amount of dividends paid and/or payable out of the profits generated in the financial year. Dividends are paid out to the Shareholders.
  
  
• Dividends (Balance Sheet)
  The amount of money set aside at the Balance Sheet date to cover the cost of forthcoming Dividend payments.
  
  
• Dormant
  A company is Dormant if it does not trade. In some cases, the company may appear to be doing business, but this is simply as part of a group or acting on behalf of a Holding Company. A dormant company may not trade on its own account.
  
  
• Employee
  A person who works for the company directly. Contract or freelance workers are not classed as employees. Companies incur PAYE and National Insurance liabilities on behalf of their employees.
  
  
• Employee Remuneration
  The aggregate amount of money paid to employees during the course of the trading period.
  
  
• Employer Remuneration/Sales
  Aggregate employee remuneration expresses as a percentage of total Turnover.
  
  
• EOM (End of month)
  Relates to a payment term. For example, a company on 'net 30 EOM' payment terms is expected to pay invoices at the end of the month following the thirtieth day after invoice. A company on 'net 60 EOM' is expected to pay invoices at the end of the month following the sixtieth day after invoice.
  
  
• Equity Gearing (%)
  This is a measure of solvency and is calculated as Net Assets (sometimes called Shareholders Funds) divided by Total Assets. For more information please see our main Help & FAQ.
  
  
• Exceptional Items
  The total amount of exceptional profits or losses made during the course of the financial year. Exceptional items are recorded 'above the line' as they are regarded as being part of the day to day operations of the business. An example might be profit or loss on revaluation of stocks.
  
  
• Export Turnover
  The total value of exports generated by the business during the financial year.
  
  
• Extraordinary Items
  The total amount of extraordinary profits/losses made during the course of the financial year. Extraordinary items are recorded 'below the line' as they are regarded as being outside the normal day to day operations of the business.
  
  
• Financial Year
  See Accounting Period
  
  
• Financial Year-end
  See Accounting Reference Date
  
  
• Fixed Assets
  Tangible Fixed Assets consist of land and buildings; fixtures and fittings; and plant and vehicles. The aggregate year end value of all Tangible Fixed Assets net of depreciation. This total includes land and buildings, fixtures and fittings, and plant and vehicles. Fixed Assets are not normally assets which are expected to be sold as part of the day-to-day business, but are part of the infrastructure of the business.
  
  
• Gearing
  The level of borrowings as a percentage of Shareholders Funds (sometimes called Net Assets).
  
  
• Gross Profit (Loss)
  The Gross Profit (Loss) is arrived at by deducting the Cost of Sales from the total Turnover figure.
  
  
• Group Loans (Current Assets)
  The total amount of Short-term debt (i.e. less than 1 year) owed to the business by an affiliated company at the Balance Sheet date.
  
  
• Group Loans (Current Liability)
  The total amount of Short-term debt (i.e. less than 1 year) owed by the business to an affiliated company at the Balance Sheet date.
  
  
• Group Loans (Long-term Liability)
  The total amount of long-term debt (i.e. more than 1 year) owed by the business to an affiliated company/companies at the Balance Sheet date.
  
  
• Hire Purchase (Current Liability)
  The total amount of money outstanding in the Balance Sheet to cover hire purchase commitments with less than a year to expiry.
  
  
• Hire Purchase (Long-term Liability)
  The total amount of money outstanding in the Balance Sheet to cover hire purchase commitments with more than one year left to the expiry date.
  
  
• Holding Company
  Sometimes called a Parent Company, this is a company which controls another since it is the majority Shareholder. The future status of the subject company may well depend upon the financial status of the parent or the group as a whole. In a group situation, the subsidiary company may require the support of the parent or ultimate parent company. It is therefore prudent to check the status of the parent and ultimate parent company if one exists.
  
  
• Industrial and Provident Societies
  Certain companies, according to their legal status, file only limited information at Companies House. For further information on Industrial and Provident Societies, building societies and other mutual societies you may contact the relevant authority on +44 (0)20 7066 9850, or visit their website fsa.gov.uk These companies have registered numbers prefixed by the code 'IP' and suffixed by the code 'R'. See also Charities.
  
  
• Insolvent
  A company is technically insolvent if its Total Assets (assuming they were to be realised or sold off) would be insufficient to meet all its liabilities (debts due). A company would not normally sell assets (which may for example include plant and equipment) under normal trading circumstances. However, if a company is forced to cease trading and realise all its assets, and was insolvent at the time, this would mean that there would be insufficient proceeds from all assets to meet the debts due to some or most creditors. Companies which are forced to cease trading due to the burden of debt are often, by definition, technically insolvent.
  
  
• Intangible Assets
  The net aggregate year end value of all assets which have no material existence eg. goodwill, trademarks etc. (Note that Net Worth is calculated as Net Assets minus Intangible Assets).
  
  
• Interest Cover
  Pretax Profits divided by Interest Payable. Shows the level of comfort in terms of profitability to cover interest due on any borrowings. If the level of cover is marginal, then either an increase in interest rates or a downturn in profitability could be significant.
  
  
• Interest Payable
  The total amount of interest charges incurred by the company during the course of the trading period. This may include interest payments on Bank Overdrafts as well as long term secured or unsecured debt.
  
  
• Issues Share Capital
  The aggregate value of the Share Capital in issue at the Balance Sheet date.
  
  
• Key Ratios
  Ratios provide a method for objectively analysing a company's performance. For more information please see our main Help & FAQ.
  
  
• Leasing (Current Liability)
  The total amount of money outstanding in the Balance Sheet to cover leasing contracts with less than a year to expiry.
  
  
• Leasing (Long-Term Liability)
  The total amount of money outstanding in the Balance Sheet to cover leasing contracts with more than one year left to the expiry date.
  
  
• Limited Company
  A business incorporated at Companies House which has Limited Liability.
  
  
• Limited Liability
  The legal status afforded to UK Limited Companies, whereby the personal assets of the owners of the company are deemed to be separate from the assets of the company and therefore protected from Creditors.
  
  
• Liquid (Liquidity)
  The term Liquid or Liquidity refers to how easily a company is able to pay debts which are due immediately. The likely ability to meet these Short-term debts will be determined by the amount of quickly realisable assets available as Current Assets.
  
  
• Liquidation
  The process of selling a company's assets to realise cash, usually in order to pay off Creditors when a business has failed.
  
  
• Liquidity Ratio
  See Current Ratio
  
  
• Medium-sized Company
  A size of company as defined by the Companies Act. A Limited Company which qualifies is exempt from disclosing its Turnover figure in the Profit and Loss Account filed at Companies House.
  
  
• Modified Accounts
  Sometimes called 'Abbreviated Accounts', these are accounts which do not disclose full Profit and Loss information, as the company concerned is exempt from having to do so under the Companies Act. Generally speaking, exemptions are based on the size of the company. Small and Medium-sized Companies defined as such by the Companies Act qualify for varying degrees of exemptions, although such companies may still volunteer to file full accounts.
  
  
• Month to Date (MTD)
  This shows the Days Beyond Terms figure for a company based on information gathered over the current month so far. This data only appears on our system if a certain minimum level of data has been received about the subject company.
  
  
• Mortgage
  A mortgage is a secured loan for which the lender has property as security.
  
  
• Net Assets
  Sometimes called Shareholders Funds. This is the surplus or deficit which remains when all liabilities (total Current Liabilities and total Long-Term Liabilities) are subtracted from all assets (total Fixed Assets and total Current Assets).
  
  
• Net Current Assets
  Sometimes called Working Capital, this is the result of Current Assets minus Current Liabilities.
  
  
• Net 30 Days
  This relates to a type of payment term. A company which has to pay its accounts on 'net 30 day' terms has thirty days following the date of the invoice to pay for goods or services received. Similarly a company paying its accounts on 'net 60 days' has sixty days following the date of invoice to pay etc.
  
  
• Net Worth
  The net worth of a company is calculated by subtracting the Intangible Assets from the Net Assets
  
  
• Notice to Dissolve Company
  Companies House can Dissolve a company for various reasons, for example when a company persistently fails to submit statutory documents, such as Accounts and Annual Returns. However, to ascertain the reasons in the case of a specific company you can contact Companies House directly.
  
  
• Notification
  This is the process by which an individual or an organisation (e.g. a business) informs the Information Commissioner of certain details about the processing of personal data which they intend to carry out. These details are used by the commissioner to make an entry describing the processing in a register (the Data Protection Register) which is available for public inspection. You will need to notify the Information Comissioner and thereby register in order to obtain our Consumer Reports. For more information please see our main Help & FAQ.
  
  
• Nominal Share Capital
  The total Share Capital that could be invested into the company by its owners.
  
  
• Number of Employees
  The average number of full time and part time workers employed by the company during the financial year.
  
  
• Number of Weeks (Accounting Period)
  Normally companies file accounts covering a 52 week trading period. Occasionally, where a change in year end occurs, the trading period may vary.
  
  
• Operating Profit (Loss)
  The amount of profit (loss) generated after deducting Depreciation and other expenses from the Gross Profit (Loss) figure.
  
  
• Other Current Assets
  Any other Liquid assets held by the company at the Balance Sheet date which do not fit under the headings of Stock, Debtors or Cash.
  
  
• Other Current Liabilities
  The total amount of these miscellaneous current liabilities which cannot be classified under the heading of trade creditors, bank overdrafts, hire purchase, leasing commitments, short loans, dividends and taxation.
  
  
• Other Debtors
  All other short-term debts not classified as trade debtors or group or director loans.
  
  
• Other Expenses
  The total amount of any costs other than those directly incurred in generating sales or deducted for the purpose of depreciation. This item would include administration expenses and transport costs. Where this figure cannot be obtained, it may form part of 'Total Expenses'.
  
  
• Other Fixed Assets
  The aggregate year end value of any fixed assets which are not classified as either tangible or intangible e.g. trade investments.
  
  
• Other Income
  Income received by the business which is derived from sources not directly related to its day to day operations. This may include bank interest and dividend receipts.
  
  
• Other Long-Term Liabilities
  Any other long-term liabilities which cannot be classified under the various headings making up long-term loans or under accruals and deferred income.
  
  
• Other Long-Term Loans
  The total amount of all long-term loans not classified as group, director or hire purchase loans and leasing contracts. This item will include all other secured or unsecured loans repayable more than one year after the Balance Sheet date.
  
  
• Other Provisions
  The aggregate amount of provisions other than deferred taxation set aside at the Balance Sheet date to meet specific future requirements. Such amounts might include pension provisions and provisions for bad or doubtful debts.
  
  
• Other Reserves
  The aggregate year end value of miscellaneous reserves (e.g. general reserve) excluding share premium account, revaluation reserve and retained earnings.
  
  
• Other Short-Term Loans
  The aggregate value of any short-term loans that cannot be classified under bank overdraft, group or director loans or hire purchase and leasing contracts.
  
  
• Overdraft
  The value of the company's overdraft with the bank at the Balance Sheet date.
  
  
• Parent Company
  Sometimes called a Holding Company, is a company which controls another as it is the majority Shareholder. The future status of the subject company may well depend upon the financial status of the parent or the group as a whole. In a group situation, the subsidiary company may require the support of the parent or ultimate parent company. It is therefore prudent to check the status of the parent and ultimate parent company if one exists.
  
  
• Partnership
  A business run by two or more people which is not being operated as a Limited company. All partners are equally personally liable for any debts incurred by the business. Partnerships do not have to file any information at Companies House or elsewhere for public record. When only one person runs a business which is not a Limited company, the business is called a Sole Trader.
  
  
• PLC (Public Limited Company)
  A Public Limited Company is a company which must have an authorised share capital of at least £50,000. Before it can commence business, it must have allotted shares to the value of at least £50,000 a quarter of which, £12,500, must be paid up in cash. Each share allotted must be paid up to at least one quarter of its nominal value together with the whole of any premium. Companies House regulations regarding PLCs are more stringent than for other Limited companies. In particular a PLC has only 7 months from year end to file accounts (private Limited companies have 10 months). A PLC has access to capital markets and can offer its shares for sale to the public through a recognised Stock Exchange, and can issue advertisements offering any of its securities for sale to the public. However there is no requirement for a PLC to be listed in the stock market.
  
  
• Press Notices
  Notice of when a director was prosecuted for not delivering Accounts and/or Returns and details of the date of the Press Notice and of the fine levied.
  
  
• Pre-Tax Margin (%)
  This is a measure of the Profitability of a company. It represents the proportion of sales left as profits or losses before tax, and is calculated as Pre-Tax Profits divided by total Turnover. It is expressed as a percentage. For more information please see our main Help & FAQ.
  
  
• Pre-Tax Profit/Loss
  The total amount of profit/loss generated by the company after all expenses (raw materials, wages, overheads, interest charges etc), and Depreciation, have been subtracted from Turnover, but before Tax.
  
  
• Pre-Tax Profits/Employees
  Pretax Profits (annualised where necessary) divided by the average number of full-time and part-time workers employed by the business during the financial year.
  
  
• Private Limited Company
  
  
• Proforma Terms
  See Accounts on Cash
  
  
• Profit and Loss Account
  A record of income and expenditure during the period covered (normally 12 months). The Profit and Loss Account includes key figures such as Turnover and Pre-Tax Profits (the key measure of profitability). However, some companies are exempt from disclosing a full Profit and Loss Account (see definitions for Small Company and Medium-sized Company).
  
  
• Public Limited Company (PLC)
  A Public Limited Company is a company which must have an authorised share capital of at least £50,000. Before it can commence business, it must have allotted shares to the value of at least £50,000 a quarter, of which £12,500 must be paid up in cash. Each share allotted must be paid up to at least one quarter of its nominal value together with the whole of any premium. Companies House regulations regarding PLCs are more stringent than for other Limited companies. In particular a PLC has only 7 months from year end to file accounts (private Limited companies have 10 months). A PLC has access to capital markets and can offer its shares for sale to the public through a recognised Stock Exchange, and can issue advertisements offering any of its securities for sale to the public. However there is no requirement for a PLC to be listed in the stock market.
  
  
• Ratios
  Ratios provide a method for objectively analysing a company's performance. For more information please see our main Help & FAQ.
  
  
• Receiver
  A person appointed to collect and manage the assets of a company when in serious financial difficulties. In the case of Bankruptcy, the assets may be sold and the proceeds distributed by a receiver to the Creditors.
  
  
• Receivership
  When a company is in the hands of the Receiver.
  
  
• Registered Office Address 
  The official address of a Limited Company listed at Companies House and at which official or legal correspondence should be served. It may not be the same as the trading address, but may also be the address of the company accountants or solicitors.
  
  
• Retained Earnings
  The accumulated value of retained earnings held in reserve at the Balance Sheet date.
  
  
• Retained Profit/Loss
  The amount of profit (loss) remaining at the end of the financial year after deducting taxation, minorities, dividends and any other transfers to reserves. This figure is then transferred to the retained earnings reserve in the Balance Sheet.
  
  
• Return on Assets
  Pretax Profits (annualised where necessary) divided by Total Assets expressed as a percentage.
  
  
• Return on Capital (%)
  This is a measure of the profitability of a company. It is taken as an indication of how much profit a business yields relative to the money invested. It is calculated as Pre-tax Profits (annualised where necessary) divided by Capital Employed, and is expressed as a percentage. For more information please see our main Help & FAQ.
  
  
• Return on Shareholders Funds
  Pretax Profits (annualised where necessary) divided by Shareholders Funds expressed as a percentage.
  
  
• Revaluation Reserves
  The total amount of reserves at the Balance Sheet date denoting the value by which Fixed Assets have been increased.
  
  
• Risk Indicator
  Provides a score from 1-100 which allows you to quickly evaluate the calculated level of risk. The Risk Indicator predicts the likelihood of a company failing in the next 12 months (the lower the score out of 100, the higher the risk). Both the Risk Indicator and Credit Rating are probability opinions and are provided for guidance purposes only. For more information please see our main Help & FAQ.
  
  
• Sales
  Amount of income received from the sale of goods or services. Sales net of VAT charged is the definition of Turnover.
  
  
• Sales/Employee
  Total Turnover (annualised where necessary) divided by the average number of full time and part time workers employed by the business during the financial year.
  
  
• Sales/Tangible Assets
  Total Turnover (annualised where necessary) divided by Tangible Assets.
  
  
• Satisfaction
  This term applies to both County Court Judgments (CCJs) and to Mortgages and Charges. In the case of CCJs, Satisfaction indicates that the debt has been subsequently paid. In the case of a Mortgage or Charge, Satisfaction indicates that the loan has been repaid.
  
  
• Secretary
  Otherwise called the Company Secretary, this is the person concerned with keeping the company's statutory books: e.g. minutes of meetings and details of the share register. Other duties can involve general administration of a company's affairs.
  
  
• Shareholders
  Either the people or other companies that, in proportion to the number and type of shares they hold, have part or whole ownership of the company.
  
  
• Shareholders Funds
  Sometimes called Net Assets, is the surplus or deficit which remains when all liabilities (total Current Liabilities and total Long-Term Liabilities) are subtracted from Total Assets (total Fixed Assets and total Current Assets).
  
  
• Share Premium Account
  The total amount held in reserve to cover the premiums arising from shares which have previously been issued at a price in excess of the nominal value.
  
  
• SIC Code
  The Standard Industrial Classification is used to identify the nature of business activities.
  
  
• Small Company
  A size of company as defined by the Companies Act. Such a business is exempt from disclosing its Profit and Loss Account and can file just a Balance Sheet.
  
  
• Social Security/VAT
  The total amount of money outstanding at the Balance Sheet date payable on such items of taxation as VAT and National Insurance.
  
  
• Sole Trader
  One person running a business, and not operating it as a Limited Company. The owner is personally liable for any debts incurred by the business. Sole Traders do not have to file any information at Companies House or elsewhere for public record. When two or more people run a business which is not run as a Limited Company, the business is called a Partnership.
  
  
• Stocks
  Usually raw material for the manufacturing process or goods the company has ready for sale.
  
  
• Stock Turnover
  Turnover divided by Stocks & Work in Progress. Where the Turnover figure is anything other than for a 52 week period it will be annualised.
  
  
• Stocks & Work in Progress
  This denotes the aggregate value of raw materials, finished goods and partly executed work held in stock at the end of the financial year.
  
  
• Striking Off
  The process of removing a company from the Companies Register at Companies House. This can either be requested by the company itself, or actioned by Companies House. The most common reason for striking off is non-filing of Accounts or Annual Returns.
  
  
• Tangible Assets (Tangible Fixed Assets)
  Consists of Land and Buildings, Fixtures and Fittings, Plant and Vehicles. The aggregate year end value of all Tangible Fixed Assets net of Depreciation. This total includes land and buildings, fixtures and fittings, and plant and vehicles. Fixed Assets are not assets which are expected to be sold as part of the day-to-day business, but are part of the infrastructure of the business.
  
  
• Tangible Assets/Employees
  Tangible Assets divided by the average number of full time and part time workers employed by the business during the financial year.
  
  
• Tax
  The total amount of corporation tax charges against profits made during the financial year.
  
  
• Total Assets
  Total Fixed Assets plus total Current Assets.
  
  
• Total Assets/Employees
  The Total Assets of the business divided by the average number of full time and part time workers employed by the company during the financial year.
  
  
• Total Current Assets
  The aggregate value of all Current Assets recorded by the company in the year end Balance Sheet. It includes Stocks and Work in Progress, Debtors, Cash and any other asset of a Liquid nature.
  
  
• Total Current Liabilities
  The aggregate of all Current Liabilities recorded in the Balance Sheet at the year end.
  
  
• Total Debtors
  The total value of all short-term debts owing to the company at the financial year end.
  
  
• Total Fixed Assets
  The aggregate year end value of all Fixed Assets including Tangible Assets and Intangible Assets. Where Depreciation is applicable the figures are expressed in net terms.
  
  
• Total Long-Term Liabilities
  The aggregate value of all long-term loans, accruals and deferred income and other long term liabilities.
  
  
• Total Net Assets
  The net total of all Fixed Assets and Current Assets less Current Liabilities and Long-Term Liabilities. The resulting figure will equate to Shareholders Funds and therefore indicates the net value of all assets attributed to the shareholders of the business.
  
  
• Total Provisions
  The aggregate amount of money set aside at the Balance Sheet date to meet specific future requirements. These might include deferred taxation, pension provisions and/or the probability that the company will have to write off bad debts.
  
  
• Total Shareholders Funds
  The aggregate value of share capital plus reserves recorded at the Balance Sheet date. This figure represents the net assets attributable to shareholders. A more conservative estimate of Shareholders Funds (sometimes called Net Worth) can be reached by deducting any goodwill figure indicated.
  
  
• Total Turnover
  The aggregate value of all sales generated by the business during the financial year.
  
  
• Trade Creditors
  The total amount of money owed to suppliers, at the Balance Sheet dates for goods or services provided.
  
  
• Trade Debtors
  The total amount of money owed to the company at the Balance Sheet date, by its customers for goods or services provided.
  
  
• Trading Address
  Business premises of a Limited company or business. Limited companies are not required to include their trading address among the information they file at Companies House. In the case of a Limited company the trading address may be different from the Registered Office address.
  
  
• Turnover
  Total invoiced Sales net of VAT during the financial year.
  
  
• UK Turnover
  The total value of domestic Turnover generated by the business during the financial year.
  
  
• Unpaid Accounts
  An account is classed as unpaid when no payment, not even small, has been made towards monies which have become due. Partial payments exclude an account from being classed as unpaid.
  
  
• VAT (Value Added Tax)
  A sales tax within the UK. Most goods and services supplied within the UK are liable to VAT. Companies must charge VAT when supplying within the UK. A company that is VAT registered may reclaim VAT which it pays on purchases. VAT is not charged on exports beyond the UK.
  
  
• Working Capital
  Sometimes called Net Current Assets, this is the result of Current Assets minus Current Liabilities.
  
  
• Working Capital/Sales
  This is defined as Working Capital (sometimes called Net Current Assets) divided by total Turnover (annualised where necessary). The result is expressed as a percentage.
  
  
• Year-end
  See Accounting Reference Date