A rate of interest that has been adjusted for inflation. For example, if the posted interest rate (nominal interest rate) is 4% and the inflation rate is 2%, the real interest rate is 2%.
When considering the value of money, the real interest rate makes more sense than the nominal interest rate. Consider an example: Your business loans another business or individual $100,000 for one year. The borrower agrees to pay back the loan, plus 4% interest at the end of the year, i.e. the borrower will pay your company $104,000 at the end of the year. If inflation had been 2% over the coarse of that year then, at that point in time one year later, a package of goods and services that would have cost your company $100,000 if you had bought it when the loan was made will now cost you $102,000. Thus, in terms of purchasing power, that 4% nominal interest will make you only roughly 2% wealthier at the end of the year, not 4% wealthier.
An SEC (Securities and Exchange Commission) regulation that states that material information that, if disclosed, may affect a company's stock price cannot be selectively disclosed to stock analysts or others. It must be made available to the public at the same time as it is made available to any individuals that are allowed to trade on the information.
The level (quantity of remaining stock) that determines when an order will be placed to replenish an on-hand inventory of goods (parts, modules or supplies; or finished goods that are bought and then resold).
Contributed by: Managerwise Staff
request for proposal
Abbreviated as RFP, a request for proposal is a document sent or otherwise made available to prospective suppliers asking them how they propose fulfilling the specified requirements of the requesting organization and what price they will charge to supply the services and/or products described in the supplier's response to the RFP. RFPs may be send to a select group of suppliers or they may be published publicly soliciting proposals from any company/individual able to fulfill the requirements.
Contributed by: Managerwise Staff
research and development
The process of inventing new products and developing them to the point where they are useable products that customers are likely to buy.
Contributed by: ManagerWise Staff
retained earnings
A company's earnings that are not paid out to shareholders as dividends.
Contributed by: ManagerWise Staff
return on assets
Abbreviated as ROA, it is an indicator of how productively a company uses its assets. ROA is calculated as the income for a 12-month period divided by the average value of the company's assets during that period. Because different industries require different assets and use them differently, ROA is not particularly worthwhile at comparing companies in different industries, but it can indicate how efficiently and effectively different companies within the same industry are putting their assets to work.
Money earned for goods or services received. In accounting, revenue is recognized when it is earned, not necessarily when the organization receives the cash.
Contributed by: ManagerWise Staff
rework
The work that is done to bring defective parts or finished goods up to acceptable standards.
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