Management Glossary

  Terms beginning with l
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labor burden
The cost of labor over and above the cost of employees salary/wages. Labor burden includes items such as payroll taxes (only taxes that must be paid by the employer rather than the employee), benefits, insurance, etc.
Contributed by: Managerwise Staff

labour

An alternate spelling for "labor". (Unless, of course, you're from an English-speaking country other than the United States, in which case "labor" is likely an alternate spelling for "labour".)

Contributed by: Managerwise Staff

last in first out
A method of accounting for inventory. Abbreviated as LIFO. While the movement of specific items of inventories of commodity goods are typically not tracked in accounting records, the LIFO method assumes, for cost purposes, that the last units that entered the inventory are the first that leave it. Under conditions of continuing inflation, this method may greatly undervalue inventory as it assumes that the first items to be placed in inventory are still there, but the latest ones (the highest cost ones) have already left
Contributed by: ManagerWise Staff
See: first in first out

late-mover advantage
An advantage that a company gains by not being among the first to compete in the market for a particular category of product or service. Late-mover advantages include being able to learn from the early market entrants mistakes -- including marketing, sales, regulatory and technology mistakes, among others.
Contributed by: ManagerWise Staff
See: first-mover advantage, early-mover advantage

lay-off
Strictly speaking, to lay somebody off means to suspend their employment with the expectation that the person will be re-employed when conditions improve. However, frequently the term is used as a euphemism for firing, which means terminating a person's employment without the expectation of re-employing them in the future.
Contributed by: ManagerWise Staff

leasehold improvements

Any additions or improvements made to a leased property or other leased asset by the company or individual that leased it (the lessee). For accounting purposes, leasehold improvements are usually not recorded as expenses, but rather as assets that are amortized over the term of the lease. At the end of the lease, the leasehold improvements typically become the property of the owner of the property (the lessor).

Contributed by: Managerwise Staff
See: amortization, asset, lessor, lessee

lessee

A company or individual that/who rents property or another asset from the company or individual that/who owns it.

Contributed by: Managerwise Staff
See: lessor, asset

lessor

A company or individual that owns property or another asset and rents it to another company or individual.

Contributed by: Managerwise Staff
See: lessee, asset

leverage
Money borrowed when investing that is used to increase the amount invested and, therefore, the profits from the investment. (Of course, if the investment loses money, leveraging increases the size of the loss, both because more was invested, creating a larger loss, and because interest is due on the loan. In addition, for leveraging to make sense, the expected percentage return on the investment, excluding the loan interest costs, must be greater than the interest rate for the loan.)
Contributed by: ManagerWIse Staff

leveraged buyout
Buying a company with borrowed funds. Typically, the assets of the firm being bought are used as collateral to secure the loan used to buy it.
Contributed by: ManagerWise Staff
See: collateral

liability
Any cash or other financial obligation that must be paid in the future resulting from a commitment that the organization has made or benefit received.
Contributed by: ManagerWise Staff

lien
A lender's claim against certain property. In the case of a mortgage, the mortgaged building is the lien and, upon failure to make the specified mortgage paymentsand after execution of due legal process, the lender would have the right assume control of the building and sell it to recover the proceeds of the mortgage loan. Mortgages are only one type of financial instrument that creates a lien. For example, bonds can also create liens on specific assets or on the overall assets of the business.
Contributed by: ManagerWise Staff

lien search
A search, generally through public records, to determine whether any creditors have claims against a company's (or an individual's) assets. This might be done as part of the due diligence efforts when considering buying a company, when a company offers an asset as collateral for a loan or when considering buying an asset of the company.
Contributed by: Managerwise Staff
See: due diligence, creditor, asset

LIFO
Last In. First Out
Contributed by: ManagerWise Staff
See: last in first out, first in first out

limited liability
In incorporated companies, in the event of insolvency, the liability of the company to its creditors is generally limited to the assets of the company. With limited liability, creditors cannot seek redress from the personal assets of the shareholders or directors of the company.
Contributed by: ManagerWise Staff
See: insolvency, liability, asset



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