Glossary of Financial Terms
E
|
EARNED REVENUE/INCOME - Revenue or income received by an organization in exchange for its products or services, e.g., tuition or performance-based government contracts. See contributed revenue/income.
|
|
ECONOMIES OF SCALE - Theory that the more you produce of a good or service, the less it costs for each additional unit, i.e. efficiency.
|
|
ENVIRONMENTAL AUDIT PHASE I - A report usually issued by an environmental engineering or other qualified entity to determine the risk or reality of environmental contamination of a real estate property. The terms of a real estate purchase often require the seller to pay for and supply a satisfactory Phase I audit as a condition of the sale, and a lender taking a mortgage on a real estate property will usually require a satisfactory review of the environmental report prior to closing the loan transaction. If the report is inconclusive or reveals possible contamination, more testing in the form of a Phase II may be required.
|
|
EQUITY - Represents the difference between an asset's market value and the amount of debt associated with that asset. Also refers to the amount a developer or owner invests in a project. In for-profit accounting, refers to the difference between total assets and total liabilities and may be called “owners’ equity.”
|
|
EXPENSES - Represent the total cost of operating the organization, including payments made to employees and other parties, including operating expenses, debt, principal payments, capital expenditures, non-cash expenses, fixed assets, and funds set aside each year for future use.
|
