Accounting, Business Studies and Economics Dictionary

Hard disk - The unit that stores information (e.g., data files and programs) within the computer.

Hard loan - A loan with commercial rates of interest and terms of repayment (see soft loan).

Hardware - The name given to all the electronic and mechanical devices that make up a computer, as opposed to software, which refers to programs

Haulage - The transport of bulk goods or products; usually refers to road transport but can also refer to rail transport.

Harmonised system - A internationally recognised and agreed classification system for international trade. It provides the different code numbers that are used to specify every item's classification.  By this method customs/tariff duty calculations are more predictable.

Hawthorne effect - The idea that workers are motivated by recognition given to them as a group.

Hedge - 1. the process of protecting oneself against unfavourable changes in prices. Thus one may enter into an offsetting purchase or sale agreement for the express purpose of balancing out any unfavourable changes in an already consummated agreement due to price fluctuations. Hedge transactions are commonly used to protect positions in (I) foreign currency, (2) commodities, and (3) securities. Or 2. financing an asset with a liability of similar maturity.

Hedge fund -    1. a limited partnership of investors that invests in speculative stocks. Or 2. a mutual fund that seeks to make money betting on a particular bond market, currency movements, or directional movements based on certain events such as mergers and acquisitions. It attempts to hedge in order to minimize an exposure to currency risk. In general, inter­national short-term bond funds usually hedge most of the currency risk, while longer-term funds have substantial exposure. Or 3. a mutual fund that hedges its risk by buying or selling options to protect its position against market risk..

Hedging – The strategy which is focused on reducing or lowering exposure to degrees of risk / loss resulting from unexpected fluctuations in foreign exchange rates, interest rates, commodity prices,  etc. Hedging in relation to securities is the taking two offsetting positions so that each if prices change, the financial risk has been limited.

Hidden asset - An asset (with value) that has not been included in the reported book value of a firm or organisation. Hidden assets can include things such as customer lists or intellectual property, or  other things which are of significant value, but that value has not been reflected in the reported book value of the firm.

Hierarchy – The order or levels of management of a business, from lowest to highest.

High employment (full employment) - Employment that is sufficient to pro­duce the economy's potential output; at high employment, all remaining unemployment is frictional, seasonal and structural.

High income oil producing countries - Countries with very high income levels to oil exports but with the economic structures of developing countries.

High/low method - An algebraic procedure that is used to classify a semi-variable cost into its variable and the fixed parts. The method  uses the extreme highest and lowest x - y pairs in the cost volume formula.  The formula is then given as y = a + bx.  a = fixed cost portion and b = the variable rate.

Hire purchase/credit sale - Methods used to buy goods now and payoff the balance over a period of time.  In the case of the former, the goods only belong to the buyer when the final payment is made.

Histogram - A chart which measures continuous data on the horizontal axis and class frequencies on the vertical axis.

Historical Cost - Assets, stock, raw materials etc. can be valued at what they originally cost. or 2) The original amount a firm paid for factors it now owns.

Historical cost accounting - The accounting practice requiring all financial items reported in the firm's financial statement  to be recorded at the original cost.

Hit-and-run competition - When a firm enters an industry to take advantage of temporarily high profits and then leaves again as soon as the high profits have been exhausted.

Holders of record – The owners of a firm's shares on the DATE OF RECORD indicated on the firm's stock ledger. Holders of record receive stock rights or dividends when they are announced.

Holding company – Any corporation owning enough voting stock in another company to control its policies and management.

Homogenous product - In the eyes of purchasers, a product every unit of which is identical to every other unit.

Horizontal equity - The idea that taxpayers with similar abilities to pay taxes should pay the same amount.

Horizontal financial analysis – Is a time series analysis of financial statements covering more than one accounting period; also called trend analysis.

Horizontal integration - One firm merges with or takes over another one in the same industry at the same stage of production.

Horizontal merger - When two firms in the same industry at the same stage in the production pro­cess merge.

Hostile takeover -  This refers to when a company attempts to purchase out another company without the support of the second company's board of directors. A hostile takeover of a company can only occur if the shares are publicly traded , as it needs the buyer to bypass the other company's board of directors and then purchase the needed shares from other different sources.

Hot-spot - High-speed wireless Internet access that is provided in con­venient public locations or at home. Using either a laptop or PDA that is 802.11 wirelessly enabled, people can download their e-mail attach­ments, watch a live webcast, or listen to streaming audio.

Household - All of the people who live under one roof and who make joint financial decisions or are subject to others making decisions for them.

Households' disposable income - The income available for households to spend: ie. personal incomes after deducting taxes on incomes and adding benefits.

Human capital -The capitalised value of productive invest­ments in persons; usually refers to value derived from expenditures on education, training, and health im­provements.

Human Development Index (HDI) - A composite index made up of three elements: an index for life expectancy, an index for school enrolment and adult literacy, and an index for GDP per capita (in PPP$).

Human resource accounting – Accounting method that recognises a vari­ety of human resources and shows them on a company's balance sheet. Under human resource accounting, a value is placed on people based on such factors as experience, education, and psychological traits, and, most importantly, future earning power (benefit) to the company.

Human resources - The employees or personnel in a business that help it to achieve its goals.

Human resources management - An integrated approach which ensures the efficient management of human resources.

Human resources plan or the workforce plan - The suggested quantity, quality and type of employees a business will require in future and how this demand is to be met.

Human resources planning/workforce planning - The process of calculating the number of employees a business needs in the short term and the long term and matching employees to the business's requirements.

Hurdle rate –  Used in capital budgeting, it means the required rate of return of a discounted cash flow analysis. If the expected rate of return on a particular investment is below that of the hurdle rate, then the project will not begun. The hurdle rate needs to be equal with the incremental cost of capital.

Hygiene factors - Those things that can lead to workers being dissatisfied.

Hyper-inflation – A situation where inflation levels are very high.

Hypothesis testing - The use of a statistical test to discriminate between two hypotheses at two specific risk (or probability) levels.

Hysteresis - The persistence of an effect even when the initial cause has ceased to operate. In eco­nomics, it refers to the persistence of unemploy­ment even when the demand deficiency that caused it no longer exists.

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