L.S. (Locus Sigilli) An abbreviation following a signature to take the place of a seal.
Labor The total human resources required to turn raw materials into goods and services.
Labor Force All noninstitutionalized individuals 16 years of age or older who are either working or actively looking for work.
Labor Force Participation Rate The ratio of the number in the labor force to the population of working age. (in the U.S. it averages about 67%)
Labor Union A legally sanctioned, formally organized association of workers who have united to represent their collective views for wages, hours, and working conditions.
Labor-Management Relations Act of 1947 (Taft-Hartley Act) A federal law that permits the President of the United States to seek an 80 day injunction to delay a strike or lock out if evidence suggests that the strike would imperil the national health and safety; declares the following union activities to be unfair labor practices: closed shops and secondary boycotts; featherbedding, and refusal to bargain in good faith; empowers states to pass right-to work laws.
Labor-Management Reporting and Disclosure Act of 1959 (Landrum-Griffin Act) Creates a bill of rights for union members; requires unions to file copies of their constitution, bylaws, and various reports with the Secretary of Labor where they become public record; bars persons convicted of certain felonies from serving as union officials; requires that union officials be bonded.
Laches Failure to do something at the proper time causing such a delay as to bar a party from bringing a legal proceeding.
Laissez-Faire The government does not interfere in the economic system.
Lambda A liquidity measure from a function of the likelihood that a firm will exhaust its liquid reserve.
Land Plots of ground and other natural resources used in the production of goods and services.
Last-In, First-Out (LIFO) A method of inventory costing based on the assumption that the most recent merchandise costs incurred should be charged against revenue.
Late Payment Charges A special, legally agreed upon fee, charged by a creditor, on any payment that is not made when due. see “finance charge”
Latent Defect A defect in materials not discernible by examination.
Law of Large Numbers A mathematical law stating that if a large number of similar persons or objects are exposed to the same risk, a predictable number of losses will occur during a given period of time.
Layoff A temporary separation dictated by the level of business a company is experiencing.
Lead Time The time required to manufacture a product from receipt of an order until it is shipped to the customer, sometimes called cycle time.
Leader Pricing Selling attractive items at lower than normal pricing.
Leading Economic Indicators Economic statistics, such as housing starts, stock prices, and consumer expectations, that foreshadow future changes in economic activity.
Lease A contract by which one person divests himself of possession of lands or chattels and grants such possession to another for a period of time.
Lease Purchase Agreement A contract providing that part of the rent can be applied to an agreed purchase price.
Leaseback To sell a property and after completing the sale, to remain in possession of it as a rent paying tenant.
Leased Department A section of a department store not operated by the store itself but an independent outside organization on a contract or percentage of sales arrangement.
Leasehold The land held by a tenant under a lease.
Leasehold Improvement An expense incurred for the permanent improvements to rented facilities. Leasehold improvements are considered fixed assets and depreciated over the leased period.
Ledger The group of accounts used by a business.
Legal Tender Anything that creditors are required to accept as payment for debts.
Lessee A tenant who obtains legal possession of the property of another and to whom a lease is given in consideration of rental payments.
Lessor An owner who grants a lease for the use of property in return for rent.
Letter of Credit An engagement by a bank made at the request of a customer that the issuer will honor drafts or other demands for payment upon compliance with the conditions specified in the letter of credit. A letter of credit may be either revocable or irrevocable.
Letter of Credit Amendment Any proposed change in terms or conditions of a letter of credit. All parties involved must accept the amendment.
Leverage A firm takes advantage of the sound market reputation of its common stock to sell bonds. The fixed capital thus obtained is used to improve company operations and earn back a greater return than the interest rate the company pays.
Leveraged Buyout The purchase of controlling interest in a corporation using borrowed funds.
Liabilities Debts or creditors’ claims that a firm owes on the day the balance sheet is prepared.
Liability In its broadest legal sense, liability means any obligation one may be under by reason of some rule of law.
Libel Malicious publication of a defamation of a person by printing, writing, signs, or pictures, for the purposes of injuring the reputation and good name of such person.
LIBOR The London Interbank Offer Rate which is commonly used as a reference rate for variable loans particularly internationally.
License A privilege granted by a state or city upon the payment of a fee.
Licensing An agreement between one company and another that permits the licensee to manufacture and market a product owned by the licenser.
Lien The right of one person, usually a creditor, to keep possession of or control of, the property of another for their purpose of satisfying a debt.
Lien Creditor A creditor who has acquired a lien on a property involved by attachment, levy, or the like.
Life Cycle of the Organization Four stages that organizations go through: formation, growth, maturity, and decline.
Limitation of Actions Statutes of limitations exist for the purpose of bringing to an end old claims.
Limited Company (Ltd.) A British term for a corporation. A business entity limiting liabilities of stockholders to the extent of their investment.
Limited Liability A feature inherent in corporations; stockholder’s responsibility for debts is restricted to the amount of their investment in the corporation.
Limited Partners Partners who are legally barred from participating in the partnership’s management but have limited liability for the debts incurred by the firm.
Limited Partnership A partnership arrangement in which the liability of one or more partners is limited to the amount of assets invested in the firm.
Line Function The operating branch of the organization which is directly concerned with producing the product or service.
Line of Credit 1. A guideline amount of credit that a customer receives after a financial and subjective evaluation;

2. The maximum amount of credit extended by a bank.

Line-Item Veto A provision to allow the President to reject particular portions of the budget rather than simply accept or reject the entire budget.
Linear Programming A mathematical technique that solves resource allocation problems.
Liquidated A claim is liquidated when it has been made fixed and certain by the parties concerned.
Liquidated Damages A fixed sum agreed upon by the parties to a contract, to be paid as ascertained damages by the party who breaches the contract.
Liquidating Dividend A distribution out of paid in capital when a corporation permanently reduces its operations or winds up its affairs completely.
Liquidation The process of winding up the affairs of a corporation or firm for the purpose of paying its debts and disposing of its assets.
Liquidity A measure of the ease with which an asset can be converted into money, without significant loss in its value.
Liquidity Ratios Measures the firm’s ability to meet maturing short-term obligations. Includes current ratio and quick ratio.
Lis Pendens Pending the suit nothing should be changed. The court having control of the property involved in the suit, issues notice, that persons dealing with the defendant regarding the subject matter of the suit do so subject to final determination of the action.
Litigation Costs In litigation, an allowance authorized by statute to a party for expenses incurred in prosecuting or defending a lawsuit.
Load Chart A modified Gantt chart that schedules capacity by work stations.
Loan Money advanced to a borrower with an agreement of repayment usually with interest within a specified period of time.
Loan Covenants Frequently banks incorporate covenants in loan agreements which are legally binding performance requirements under which the debtor has to comply. Violation of covenants will cause the borrower to be in default.
Loan Value The amount of money that can be borrowed against real estate, an insurance policy, bonds, stocks or other property.
Lobbying Employing persons to influence state and federal legislators to sponsor laws that further one’s own interest or inhibit those of one’s opponents.
Local Area Network (LAN) A network connecting personal computers and other equipment within a local area to help people share equipment, data, and software.
Lock Box (Lockbox) A regional bank depository used by large corporations to obtain earlier receipt of customer payments rather than having checks sent to one central office. The arrangement provides the creditor with better control of cash and earlier availability of cash balances. Vendors who distribute nationally usually locate such lock boxes strategically and centralize daily deposits for prompt availability of funds.
Lock Box Optimization Model A set of variables, relationships, and rules that determine the optimal number of lock boxes, their locations, and the customer allocations to the selected lock box sites.
Lockout Management locks the doors and prevents workers from entering the building.
Logical Reference The programming concept of specifying what data the programmer wants but not saying exactly how the computer should find the data.
Logical View of Data The view of data expressing the way the user thinks about the data.
Long Run A period during which all the firm’s resources are variable; also, a period during which previous wage contracts and resource price agreements can be renegotiated.
Long-Term Liabilities Debts that are due in more than one year.
Long-Term Plans Plans that extend beyond five years.
Lorenz Curve A curve showing the percentage of total income received by a given percentage of recipients whose incomes are arranged from smallest to largest.
Loss The excess of the cost of an asset over its sale price. An expense resulting from not making a profit.
Loss Leader The deliberate sale of a product or service sometimes below cost, in order to attract new customers.
Lot A parcel or a single article that is the subject matter of a separate sale or delivery, whether or not it is sufficient to perform the contract.
Lower-of-Cost-or-Market Method A method of valuing inventory that reports inventory at the lower of its cost or current market value (replacement cost).

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