Last-In-First-Ouf (LIFO): An accounting method for valuing inventory. It treats the last item of stock purchased as the first item of stock used. Its opposite is FIFO. During periods of inflation, LIFO gives a more accurate picture of the true profitability of a firm.
Leverage: US term for Gearing.
Liability: Any item of debt which is owed to others. It is normally divided into different categories, based on their maturity. For example, Current Liabilities, Deferred or Long-term Liabilities, Accrued Liabilities and Contingent Liabilities.
Limited Company: The short form ‘LTD’ or ‘BHD’ following the name of a company indicates that it has been registered under the Companies Act with Limited Liability for the stockholders.
Limited Liability: The legal exemption of a stockholder from being responsible for the debts of a firm beyond the amount he has invested in it.