|After-tax profit margin
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Definition of After-tax profit margin
After-tax profit margin
The ratio of net income to net sales.
Money after-tax rate of return minus the inflation rate.
A situation wherein participants in a transaction have different net tax rates.
taxes as a fraction of income; total taxes divided by total taxable income.
The ratio of net income before taxes to net sales.
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
The tax rate at which a party to a prospective transaction is indifferent between entering
A transaction in which an investor borrows to buy additional shares, using the shares
Net income plus depreciation.
The difference between variable revenue and variable cost.
The argument that double (corporate and individual) taxation of equity returns makes
Rate of return required on a par bond to produce the same after-tax yield to
A non-cash expense that provides a source of free cash flow. Amount allocated during the
The value of the tax write-off on depreciation of plant and equipment.
The dollar equivalent of the safety cushion for a portfolio in a contingent immunization
Agreement between two countries that taxes paid abroad can be offset against
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Effective margin (EM)
Used with SAT performance measures, the amount equaling the net earned spread, or
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Gross profit margin
Gross profit divided by sales, which is equal to each sales dollar left over after paying
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
Initial margin requirement
When buying securities on margin, the proportion of the total market value of
Interest equalization tax
tax on foreign investment by residents of the U.S. which was abolished in 1974.
Interest tax shield
The reduction in income taxes that results from the tax-deductibility of interest payments.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.
Maintenance margin requirement
A sum, usually smaller than -but part of the original margin, which must
This allows investors to buy securities by borrowing money from a broker. The margin is the
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
A demand for additional funds because of adverse price movement. Maintenance margin
Margin requirement (Options)
The amount of cash an uncovered (naked) option writer is required to
Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.
Net operating margin
The ratio of net operating income to net sales.
Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses
Operating profit margin
The ratio of operating margin to net sales.
The margin needed to cover a specific new position. Related: margin, security deposit (initial)
Personal tax view (of capital structure)
The argument that the difference in personal tax rates between
Indicator of profitability. The ratio of earnings available to stockholders to net sales.
The present value of the future cash flows divided by the initial investment. Also called
Ratios that focus on the profitability of the firm. profit margins measure performance
Progressive tax system
A tax system wherein the average tax rate increases for some increases in income but
A probability used to determine a "sure" expected value (sometimes called a
Short-term tax exempts
Short-term securities issued by states, municipalities, local housing agencies, and
Split-rate tax system
A tax system that taxes retained earnings at a higher rate than earnings that are
TANs (tax anticipation notes)
tax anticipation notes issued by states or municipalities to finance current
Tax anticipation bills (TABs)
Special bills that the Treasury occasionally issues that mature on corporate
Set of books kept by a firm's management for the IRS that follows IRS rules. The stockholder's
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
The municipal bond market where state and local governments raise funds. Bonds issued
Tax free acquisition
A merger or consolidation in which 1) the acquirer's tax basis in each asset whose
A nation with a moderate level of taxation and/or liberal tax incentives for undertaking specific
Tax Reform Act of 1986
A 1986 law involving a major overhaul of the U.S. tax code.
The reduction in income taxes that results from taking an allowable deduction from taxable income.
Swapping two similar bonds to receive a tax benefit.
Tax deferral option
The feature of the U.S. Internal Revenue Code that the capital gains tax on an asset is
Tax-deferred retirement plans
Employer-sponsored and other plans that allow contributions and earnings to
The option to sell an asset and claim a loss for tax purposes or not to sell the asset and
A merger or consolidation that is not a tax-fee acquisition. The selling shareholders are
Gross income less a set of deductions.
Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.
Two-tier tax system
A method of taxation in which the income going to shareholders is taxed twice.
Method of indirect taxation whereby a tax is levied at each stage of production on the value
An additional required deposit to bring an investor's equity account up to the initial margin
A tax levied by a country of source on income paid, usually on dividends remitted to the
The profit a company makes before expenses and taxes are taken away.
What the business paid to the IRS.
Whatâ€™s left over after you subtract the cost of goods sold and all your expenses from sales.
The profit made by a division after deducting only those expenses that can be controlled by the
Costâ€“volumeâ€“profit analysis (CVP)
A method for understanding the relationship between revenue, cost and sales volume.
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
The difference between the price at which goods or services are sold and the cost of sales.
The amount added to a lower figure to reach a higher figure, expressed as a percentage of the higher figure, e.g. the margin that profit represents as a percentage of selling price.
The cost of producing one extra unit.
Margin of safety
A measure of the difference between the anticipated and breakeven levels of activity.
See operating profit.
The profit made by the business for an accounting period, equal to gross profit less selling, finance, administration etc. expenses, but before deducting interest or taxation.
The difference between income and expenses.
Profit and Loss account
A financial statement measuring the profit or loss of a business â€“ income less expenses â€“ for an accounting period.
Profit before interest and taxes (PBIT)
A division or unit of an organization that is responsible for achieving profit targets.
See cash value added.
The amount of profit after deducting interest, taxation and dividends that is retained by the business.
The result of subtracting cost of goods sold from sales. Synonymous with gross margin.
Payroll tax expense
The amount of tax associated with salaries that an employer pays to governments (federal, state, and local).
Payroll taxes payable
The amount of payroll taxes owed to the various governments at the end of a period.
cash flow from operating activities, or cash flow from profit
This equals the cash inflow from sales during the period minus the cash
An intermediate measure of profit equal to sales revenue
earnings before interest and income tax (EBIT)
A measure of profit that
gross margin, or gross profit
This first-line measure of profit
See earnings before interest and income tax (EBIT).
The general term profit is not precisely defined; it may refer to net
profit and loss statement (P&L statement)
This is an alternative moniker
This concept refers to a separate source of revenue and
Ratios based on sales revenue for a period. A measure of
The profit per unit sold of a product after deducting product
Profit Margin Ratio
A measure of how much profit is earned on each dollar of sales. It
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