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Tax Exempt Purposes

The specific corporate purpose of an organization must allow it to qualify as a tax-exempt organization under the Internal Revenue Code. The Code Section 501 sets forth 29 types of nonprofit organizations that are exempt from at least some federal income taxes. See Charitable Purposes above for the requirements of a 501(c)(3) corporation to which contributions are deductible. 

Temporarily Restricted Net Assets

The part of the net assets of an organization resulting from contributions and other inflows of assets whose use by the organization is limited by donor-imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of the organization pursuant to those stipulations.

Temporary Restriction

A donor-imposed restriction that permits the done organization to use up or expend the donated assets as specified and is satisfied either by the passage of time or by actions of the organization.


The length of time until a loan or other obligation is due.

Term Loan

Is typically a loan drawn in a lump sum on the date the credit agreement is signed (or shortly thereafter) and repaid in regular installments pursuant to a schedule set forth in the credit agreement or in full on the maturity date. Once a term loan is drawn, the borrower may not make any further borrowings under the loan even if it has made payments towards the loan balance. Interest will be payable on the amount drawn either on a periodic basis or at maturity.

The 5% And 95% -- The Five Percent (5%) And The Ninety-Five Percent (95%)

Refers to the totality of a foundation's assets and the portion that, to avoid excise tax, must be paid out in program expenditures (and administration in support of such)—the 5% payout; and the 95% that is typically referred to as the endowment, and is traditionally invested primarily for financial gain and preservation of the foundation's corpus or whole.

The Code

The Internal Revenue Code of 1986, as amended.

Times Interest Earned Ratio

Ratio of pretax income or change in unrestricted net assets plus interest expense to interest expense. This ratio measures how many times interest expense is covered by operating earnings.


In the collateralized loan context, tranche relates to the slices of investments or different forms of capital that make up the larger pool of investments.

Trend Analysis

Comparisons of financial statements covering different sequential time periods in order to identify financial trends.

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