A contract between the owner (lessor) and the tenant (lessee) stating the conditions under which the tenant may occupy or use real estate or equipment. Terms usually include a specific period of time and a predetermined rate.
The dealer owns the business. A major or regional oil company or a distributor owns the land and building (i.e. gas station) and leases it to a dealer. The dealer operates the location and pays rent to the owner (as opposed to an open dealer that owns the property). This arrangement gives the oil company or distributor a guaranteed supply outlet for their petroleum products, pursuant to a supply contract. A typical lessee dealer operates 1-2 stores and does not wholesale gasoline. Also known as company controlled, contractor-operated, and direct serve dealer.
A term used to describe the use of debt to improve the profitability of a business. Leverage can best be described in terms of its effect on the Balance Sheet and on the Return on Equity ratio (ROE). When a company borrows to purchase assets, it increases the asset portion of the Balance Sheet and liability portion; net worth (equity) stays the same. If the assets are used to generate more net profits, then the profitability of the business has been improved as reflected in the ROE ratio in the following example: Higher Net Profit e Unchanged Equity = Higher Return on Equity Liabilities, Current and Long-Term Liabilities are monies owed to others that are stated in summary form on a business’ Balance Sheet. They include accounts payable, taxes, sales contracts, and similar obligations.
A specific lease involving at least three parties: a lessor, a lessee and a funding source, which allows the lessor/owner to purchase the equipment by making a specific equity investment and to finance the remaining balance by issuing non-recourse note(s) to the lender(s).
A charge upon or security interest in real or personal property maintained to ensure the satisfaction of a debt or duty ordinarily arising by operation of law.
The disposal, at maximum prices, of the collateral securing a loan, and the voluntary and enforced collection of the remaining loan balance from the obligators and/or guarantors.
This is a term used to describe a business’ ability to meet its current liabilities using its current assets; in simple terms, it means that a business has enough cash from its operations to meet its obligations in a timely manner. There are three major measures of liquidity: Working Capital, Current Ratio and Quick Ratio.
quantitative value used to assess whether a soil will behave as a brittle solid, semisolid, plastic, or liquid. LI is equal to the difference between the natural moisture content of the soil and the plastic limit (PL) divided by the plasticity index (PI).
Current Ratio = Current Assets ÷ Current Liabilities Formula: CR = CA ÷ CL Quick Ratio = (Current Assets — Inventories) ÷ Current Liabilities Formula: QR = (CA — I) ÷ CL
A reserve rate based upon the ratio of the aggregate net chargeoffs (chargeoffs less recoveries) for the most recent five years to the total average loans outstanding for the comparable 5-year period.
the concentration of a gas below which the concentration of vapors is insufficient to support an explosion. LELs for most organics are generally 1 to 5 percent by volume.
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