205 Ley Street, Ilford, Essex, IG1 4BL, UK
0208 1333 786
0208 9116 077

J – N


Joint and several liability

An undertaking by a group of two or more parties to be responsible, either individually or jointly, for any liability which may exist after any member or members have failed to meet their obligations.

Job costing

Management accounting technique enabling cost allocations through examining time, materials and all other expenses involved in creating a project.

Joint ownership

Equal ownership of property by two or more people.

Joint venture

Co-operation between two or more individuals/businesses in the undertaking of a specific enterprise, sharing risks, control, expertise, revenues and costs.

Joint liability

Legal liability of two or more parties for claims against or debts incurred by them jointly.

Junk bonds

Bonds which offer high rates of interest but with correspondingly higher risk attached.


Keyman/Keywoman insurance

Insurance policy providing cover for a company should a key figurehead pass away which would cause significant loss.


Lease back

Situation in which a property is sold by its owner to another person/company on condition that the purchaser leases the property back to the original owner for an agreed rent over a set term.


The use of financial instruments to increase the return on an investment, or the amount of debt used to finance a business’ assets.


The right of a creditor to take possession or control of the property of a debtor upon them failing to satisfy a debt.


Parts of national income which are not used for consumptions purposes, including net taxes, savings and imports.


Legal contract in which the owner of an asset, e.g. a property, agrees to another individual/business utilising that asset in return for a consideration, such as rental payments.

Limited liability

The principle that a shareholder’s liability for company debts is limited to the nominal value of their shares and therefore that their personal assets are not at risk should the company become insolvent.


The level of ease with which an asset can be converted into cash.


A person who grants a lease, also known as a landlord.


A book in which the accounts of a business are kept. The main types of ledger are the nominal ledger, containing the nominal accounts which list revenue and costs, the sales ledger which lists the sales accounts of customers, and the purchase ledger which lists the purchase accounts of suppliers.


A person to whom a lease is granted, also known as a tenant.

Leveraged buyout

The takeover of a company by investors who use the company’s own assets as collateral to raise the money that finances the bid.

LIBOR (London Inter Bank Offered Rate)

Interest rate at which banks lend money to each other.

Liquid market

A market in which large quantities of securities are being bought and sold daily with relative ease.


The process of a person or company taking legal action against another.


The sale of the assets of a bankrupt company to pay creditors.


An official appointed to supervise the liquidation of a company.

Liquidity ratio

See ‘acid test ratio’.

Loss adjuster

An independent assessor called in by an insurance company to check the validity of claims.

Loan capital

The part of a company’s capital structure which is raised by loans, e.g. debentures, which usually pay fixed interest over a fixed period.

Loan stock

A security bearing a fixed rate of interest and where the capital is repaid after a given period of time.

Long term liabilities

Debts of a person or company not due for repayment within the next accounting period.


Main residence

The place where you normally live and consider to be your home.

Marketable security

A tradable equity that is classified as a current asset.


The principle that costs/liabilities are matched with corresponding income/assets.

Maturity date

Date at which an asset or liability becomes repayable.

Management buy-in

The purchase of a company by outside investors who bring in new management.

Management buy-out

The purchase of some or all of a company’s shares by its managers in order to run the company independently.

Marginal cost

The incremental cost attributable to one extra unit of production.

Married couples allowance

An extra tax allowance you are entitled to if you are married.

Market capitalisation

Calculated by multiplying share price as quoted on an exchange by the number of shares in issue. This gives the market value of a company.

Market trend

The general direction of overall price movements in a market.

Market value

The price which you can obtain for an asset if you sold it freely on the open market.

Money laundering

The manipulation of money, usually originating from an illegal source, so as to seem to have originated from a lawful one.

Memorandum of association

Company document containing items such as name, objects and powers, and original share capital.


The process of two companies becoming one.

Monetary policy

The control of the money supply and interest rates by a government or central bank.

Money Purchase Scheme

Pension scheme in which benefits are dependent on contributions and growth of the fund.

Mutual Fund

Scheme enabling investment by small private investors in shares, bonds and other securities.


National Insurance

Contributions paid by employees, self-employed individuals and employers based on income earned for the provision of the benefits such as the state pension. The contributions are administered by HM Revenue & Customs.

Negotiable instrument

Can be a cheque or security that represents money that is payable and which can be transferred from one entity to another.

Near money

Assets which are readily convertible into cash without running the risk of causing significant losses in value.


The absence of bias when handling financial information.

Net current assets

Calculated by subtracting current liabilities from current assets.

Net yield

The return on an investment after deducting tax, commission and other expenses.

Non discretionary

Means the action/payment is mandatory and is not up to the individual or company to change.

Net realisable value

Generally equal to the selling price of goods or assets less the selling costs incurred.

Negative goodwill

Arises when the fair value of the net assets of a business exceed the price paid on acquisition.

Net present value

The total series of expected cash flows discounted over the time period in which they are incurred/earned less the initial dividend. NPV calculations are primarily used to appraise long-term projects by accounting for the time value of money.

Net profit margin

Calculated as net profit as a percentage of sales, indicating a company’s ability to control its costs and overheads and generate an underlying return.

Notice of coding

The notification of your PAYE code that you receive from the Inland Revenue.

Nominal account

A ledger account used to itemise/analyse revenue, expenditure, assets and liabilities.

Nominal ledger

See ‘ledger’.

Non contributory pension plan

An employer funded employee pension scheme to which employees do not make contributions.

National tax

Tax treated as having been paid and not repayable. Applicable to, for example, life insurance policy gains and foreign income dividends.

Professional Consultation

We help our clients determine the right strategic priorities to grow profitably and maximise value, and offer support and practical solutions to achieve these objectives. We are happy to provide no-obligation advice.