Glossary - Agribusiness Management - page 431

lead-time In logistics management, the amount of time necessary to cover the period
between the warehouse's reordering and its receipt of the additional stock.
lease A contract by which the control over the right to use an asset is transferred from the
lessor (owner) to the lessee (person acquiring control) for a specifi ed period of time in
return for a lease payment.
leasing A form of renting, usually involving a contractual agreement that specifi es the
terms of the arrangement; normally for a longer period of time than a rental agree-
ment.
lessee A person or organization that pays for the privilege of using the property of another
for a specifi ed period of time.
lessor A person or organization that leases property to another person or organization but
maintains ownership of the property for the period of the lease.
leverage In fi nance, the concept of using borrowed funds to expand the total capital of the
fi rm beyond the amount of owner equity.
liabilities Anything a business owes to those outside the business, such as accounts pay-
able, loans, bonds, and mortgages; the total debt of the business.
licensing A business arrangement where a fi rm (licensee) in the target market produces
and distributes another fi rm's (licensor) product; in return the licensor receives a fee or
royalty for the right to license the product.
limited liability company (LLC) A form of business organization that closely resembles
a partnership, but provides its members limited liability; creditors or others who have a
claim against an LLC can pursue the assets of the LLC to satisfy debt and other obliga-
tions, but they cannot pursue personal or business assets owned by the individual mem-
bers of the LLC.
l imited partner A partner who has taken steps to limit his / her liability in a partnership;
the agreement must be in writing and limited partners may not take an active role in
managing the partnership.
limited partnership An association of two or more people as owners of a business in
which some partners contribute money or ownership capital to the partnership without
incurring the full legal liability of a general partner.
limited returns In cooperatives, the requirement that returns on member equity be limited
to a nominal amount, not greater than the going interest rate, or 8 percent (whichever is
higher); done to ensure that members of the cooperative do not view the cooperative as
an investment in and of itself.
line organization An organizational structure in which there is one simple, clear line
of authority extending downward from top management to each person in the
organization.
line and staff organization An organizational structure that is a variation of the line
organization in that a place for specialists is included.
line of credit A commitment by the lender to make available to the fi rm a certain sum of
money, usually for a one-year period, at a specifi ed rate of interest at whatever time the
fi rm needs the loan; also known as a revolving loan.
linear projection A quantitative procedure for projecting past trends into to a future time
setting for developing forecasts.
liquidity ratios A class of fi nancial ratios that measure the fi rm's ability to pay short-term
obligations as they come due.
logic A qualitative technique involving the combination of fact, induction, and deduction
to solve a problem.