Glossary

A consecutive 12-month period used for accounting purposes. A company may elect a fiscal year that does not correspond to a calendar year.

Assets that are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings and equipment.

A financial ratio that measures a company’s ability to pay its fixed expenses for a period through its earnings for that period. 

Any type of fixed expense that recurs on a regular basis. For purposes of the fixed charge coverage ratio, fixed charges commonly include interest expense paid in cash, principal payments in respect of indebtedness for borrowed money and all “restricted payments” paid in cash.

A good that has become permanently attached to real property or so related to realty that it is considered part of such real property.

An interest rate that is adjusted periodically based upon a specific index or benchmark. For example, a floating rate may be tied to an index such as LIBOR (London Interbank Offered Rate).

A form of inventory financing for a dealer of consumer or commercial goods. Floor plan finance is an alternative to traditional bulk inventory financing in that the lender finances the dealer’s purchase of specific goods (i.e., on an individual rather than bulk basis), effectively substituting itself for the supplier. 

An agreement by a lender to refrain, for a limited period, from exercising rights or remedies against a borrower, other obligor and/or collateral following the occurrence of an event of a default.