Rate of return

The measure of the profitability of an investment, generally calculated as net profits divided by capital employed for a business.

Real interest rate

Nominal interest rate net of the current rate of inflation.


Outstanding debts owed to a company.


A period of general economic decline, normally with stagnating or declining economic activity, often defined as a period of two or more consecutive quarters of falling economic output.

Redeemable preference shares

Preference shares that the issuing company reserves the right to redeem.

Registrar of Companies

The official body, Companies House, with responsibility for the registration of limited companies, storing appropriate information and making it available to the general public.

Regressive tax

Tax imposed at a rate which decreases as the amount subject to taxation increases. Most commonly arising with the levy of fixed, lump sum taxes.

Residence status

The definition of a person’s status when living or working abroad with regard to his/her taxation liabilities.

Retained earnings

A company’s post tax profits not distributed as dividends.

Returns to scale

Term referring to the change in outputs subsequent to a change in inputs. If outputs increase proportionately more than inputs there are increasing returns to scale, if outputs increase in line with inputs there are constant returns to scale, and if outputs increase proportionately less than inputs there are decreasing returns to scale.


The right to consideration in exchange for performance, usually in the form of the supply of goods or services to a customer. Generally stated in the financial statements net of value added tax and trade discounts.

Reversionary interest

The right to receive property which is held in a trust at a future date.

Rights issue

An offer to buy shares made by a company to existing shareholders in proportion to their existing holding.

Risk premium

The additional return expected for investing in a riskier class of asset over a less risky one.

ROCE (return on capital employed)

Calculated as earnings before interest and tax divided by total capital employed, giving a measure of a company’s profitability.

Rollover relief

Capital gains tax relief applying to a person or company which disposes of a business or an asset and then reinvests the sale proceeds in a qualifying replacement within a qualifying period.

RPI (Retail Price Index)

The measurement of inflation calculated by comparing the change in price of a basket of consumer goods, reflecting typical spending patterns, over a period of time.