|Net asset value (NAV)|
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Definition of Net asset value (NAV)
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in today’s dollars of cash flows that occur in different time periods.
A merger or consolidation in which an acquirer purchases the selling firm's assets.
The net present value analysis of an asset if financed solely by equity
Any possession that has value in an exchange.
The ratio of total assets to stockholder equity.
Also called surplus management, the task of managing funds of a financial
Ratios that measure how effectively the firm is managing its assets.
The decision regarding how an institution's funds should be distributed among the
A security that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
Categories of assets, such as stocks, bonds, real estate and foreign securities.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
Creditors exchange the debt of one defaulting borrower for the debt of another
A model for determining the required rate of return on an asset.
A firm's investing in assets that are riskier than those that the debtholders expected.
Asset substitution problem
Arises when the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
Asset pricing model
A model, such as the Capital asset Pricing Model (CAPM), that determines the required
A firm's productive resources.
A common element of a financial plan that describes projected capital spending and the
With respect to convertible bonds, the value the security would have if it were not convertible
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
An amount the insurance company will pay if the policyholder ends a whole life
Also called parity value, the value of a convertible security if it is converted immediately.
value of cash, accounts receivable, inventories, marketable securities and other assets that
Dynamic asset allocation
An asset allocation strategy in which the asset mix is mechanistically shifted in
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
The amount of advantage over a current market transaction provided by an in-the-money
The weighted average of a probability distribution.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Offsetting exposures in one currency with exposures in the same or another currency,
Extraordinary positive value
A positive net present value.
See: Par value.
Claims on real assets.
Firm's net value of debt
Total firm value minus total firm debt.
Long-lived property owned by a firm that is used by a firm in the production of its income.
Fixed asset turnover ratio
The ratio of sales to fixed assets.
The amount of cash at a specified date in the future that is equivalent in value to a specified
A legal claim to some future benefit, typically a claim to future cash. Goodwill, intellectual
International Monetary Fund
An organization founded in 1944 to oversee exchange arrangements of
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
Intrinsic value of an option
The amount by which an option is in-the-money. An option which is not in-themoney
Intrinsic value of a firm
The present value of a firm's expected future net cash flows discounted by the
asset that is easily and cheaply turned into cash - notably cash itself and short-term securities.
net amount that could be realized by selling the assets of a firm after paying the debt.
The amount a policyholder may borrow against a whole life insurance policy at the interest rate
value of property, equipment and other capital assets minus the depreciation. This is an
Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.
1) The price at which a security is trading and could presumably be purchased or sold.
Market value ratios
Ratios that relate the market price of the firm's common stock to selected financial
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
Related: par value.
Gold held by governmental authorities as a financial asset.
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Net adjusted present value
The adjusted present value minus the initial cost of an investment.
Net advantage of refunding
The net present value of the savings from a refunding.
Net advantage to leasing
The net present value of entering into a lease financing arrangement rather than
Net advantage to merging
The difference in total post- and pre-merger market value minus the cost of the merger.
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
Net benefit to leverage factor
A linear approximation of a factor, T*, that enables one to operationalize the
Net book value
The current book value of an asset or liability; that is, its original book value net of any
Net cash balance
Beginning cash balance plus cash receipts minus cash disbursements.
This is the difference between a day's last trade and the previous day's last trade.
Net errors and omissions
In balance of payments accounting, net errors and omissions record the statistical
Net financing cost
Also called the cost of carry or, simply, carry, the difference between the cost of financing
Sum of disbursement float and collection float.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
Gross, or total, investment minus depreciation.
A lease arrangement under which the lessee is responsible for all property taxes, maintenance
Net operating losses
Losses that a firm can take advantage of to reduce taxes.
Net operating margin
The ratio of net operating income to net sales.
The period of time between the end of the discount period and the date payment is due.
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
Net present value of growth opportunities
A model valuing a firm in which net present value of new
Net present value of future investments
The present value of the total sum of NPVs expected to result from
Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs
Net profit margin
net income divided by sales; the amount of each sales dollar left over after all expenses
Net salvage value
The after-tax net cash flow for terminating the project.
Net working capital
Current assets minus current liabilities. Often simply referred to as working capital.
Common stockholders' equity which consists of common stock, surplus, and retained earnings.
Reducing transfers of funds between subsidiaries or separate companies to a net amount.
To get or bring in as a net; to clear as profit.
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
Original face value
The principal amount of the mortgage as of its issue date.
Other current assets
value of non-cash assets, including prepaid expenses and accounts receivable, due
Also called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date.
Reducing fund transfers between affiliates to only a netted amount. netting can be done on
Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an
The amount of cash today that is equivalent in value to a payment, or to a stream of payments,
Present value factor
Factor used to calculate an estimate of the present value of an amount to be received in
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