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Financial Terms | |
net income (also called the bottom line, earnings, net earnings, and net |
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Definition of net income (also called the bottom line, earnings, net earnings, and netnet income (also called the bottom line, earnings, net earnings, and netoperating earnings)
Related Terms:45-Degree LineA line representing equilibrium in the goods and services market, on a diagram with aggregate demand on the vertical axis and aggregate supply on the horizontal axis. Abusive Earnings ManagementThe use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result. Abusive Earnings ManagementA characterization used by the Securities and Exchange Accounting earningsearnings of a firm as reported on its income statement. Accrued Incomeincome that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment. Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable ![]() Adjusted Earningsnet income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss. Adjusted Income from ContinuingOperations Reported income from continuing operations approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a Bank lineline of credit granted by a bank to a customer. basic earnings per share (EPS)This important ratio equals the net Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how Book IncomePretax income reported on the income statement. bottom lineA commonly used term that refers to the net income (profit) Bottom-up equity management styleA management style that de-emphasizes the significance of economic ![]() Capital market line (CML)The line defined by every combination of the risk-free asset and the market portfolio. Cash flow time-lineline depicting the operating activities and cash flows for a firm over a particular period. Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations Characteristic lineThe market model applied to a single security. The slope of the line is a security's beta. common-size income statementincome statement that presents items as a percentage of revenues. Core EarningsA measure of earnings that includes only the results of the primary operating Cost Plus Estimated Earnings in Excess of BillingsRevenue recognized to date under the percentage-of-completion method in excess of amounts billed. also known as unbilled accounts Current Income Tax ExpenseThat portion of the total income tax provision that is based on Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result Demand line of creditA bank line of credit that enables a customer to borrow on a daily or on-demand basis. diluted earnings per share (EPS)This measure of earnings per share ![]() Disposable Incomeincome less income tax. Dividend incomeincome that a company receives in the form of dividends on stock in other companies that it holds. earned incomeEarned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits. Earningsnet income for the company during the period. EarningsIn general, refers to a company's total sales less cost of sales and operating expenses, including interest and income tax. earnings before interest and income tax (EBIT)A measure of profit that Earnings before interest and taxes (EBIT)A financial measure defined as revenues less cost of goods sold 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. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working Earnings ManagementThe active manipulation of earnings toward a predetermined target. Earnings per ShareA measure of the earnings generated by a company on a per Earnings per share (EPS)EPS, as it is called, is a company's profit divided by its number of outstanding earnings per share (EPS)See basic earnings per share and diluted earnings per share. Earnings per share of common stockHow much profit a company made on each share of common stock this year. Earnings retention ratioPlowback rate. Earnings surprisesPositive or negative differences from the consensus forecast of earnings by institutions Earnings yieldThe ratio of earnings per share after allowing for tax and interest payments on fixed interest EBBS - Earnings before the bad stuffAn acronym attributed to a member of the Securities and EBDDT - Earnings before depreciation and deferred taxesThis measure is used principally by Economic earningsThe real flow of cash that a firm could pay out forever in the absence of any change in Economic incomeCash flow plus change in present value. Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Euro lineslines of credit granted by banks (foreign or foreign branches of U.S. banks) for Eurocurrencies. European Monetary System (EMS)An exchange arrangement formed in 1979 that involves the currencies Exposure nettingOffsetting exposures in one currency with exposures in the same or another currency, Firm's net value of debtTotal firm value minus total firm debt. Fixed-income equivalentalso called a busted convertible, a convertible security that is trading like a straight Fixed-income instrumentsAssets that pay a fixed-dollar amount, such as bonds and preferred stock. Fixed-income marketThe market for trading bonds and preferred stock. Fixed-income securityA security that pays a specified cash flow over a Flat price (also clean price)The quoted newspaper price of a bond that does not include accrued interest. Formalized Line of CreditA contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year. Fully diluted earnings per sharesearnings per share expressed as if all outstanding convertible securities Incomenet earnings after all expenses for an accounting period are subtracted from all Income beneficiaryOne who receives income from a trust. Income bondA bond on which the payment of interest is contingent on sufficient earnings. These bonds are Income from Continuing OperationsAfter-tax net income before discontinued operations, Income fundA mutual fund providing for liberal current income from investments. income fundsMutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares. Income SmoothingA form of earnings management designed to remove peaks and valleys Income SplittingThis is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs. INCOME STATEMENTAn accounting statement that summarizes information about a company in the following format: Income StatementOne of the basic financial statements; it lists the revenue and expense accounts of the company. income statementFinancial statement that summarizes sales revenue Income statementA financial report that summarizes a company’s revenue, cost of income statementFinancial statement that shows the revenues, expenses, and net income of a firm over a period of time. Income statement (statement of operations)A statement showing the revenues, expenses, and income (the Income StatementsA financial statement that displays a breakdown of total sales and total expenses. Income stockCommon stock with a high dividend yield and few profitable investment opportunities. INCOME TAXWhat the business paid to the IRS. Income taxA government tax on the income earned by an individual or corporation. Income Tax ExpenseSee income tax provision. Income Tax ProvisionThe expense deduction from pretax book income reported on the Incomes PolicyA policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example. Interest incomeincome that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies. International Monetary FundAn organization founded in 1944 to oversee exchange arrangements of International Monetary Fund (IMF)Organization originally established to manage the postwar fixed exchange rate system. International Monetary Market (IMM)A division of the CME established in 1972 for trading financial Internet business modela model that involves intraneta mechanism for sharing information and delivering data from corporate databases to the local-area network (LAN) desktops Investment incomeThe revenue from a portfolio of invested assets. Investment product line (IPML)The line of required returns for investment projects as a function of beta Life Income FundCommonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80. line employeean employee who is directly responsible for Line itemGeneric types of assets, liabilities, income or expense that are common to all businesses and Line of credit An informal arrangement between a bank and a customer establishing a maximum loan Line of creditAn informal arrangement between a bank and a customer establishing a maximum loan line of creditAgreement by a bank that a company may borrow at any time up to an established limit. Line of CreditAn agreement negotiated between a borrower and a lender which establishes the maximum amount against which a borrower may draw. The agreement also sets out other conditions, such as how and when money borrowed against the line of credit is to be repaid. line of creditA revolving source of credit with a pre-established limit. You access the funds only as you need them, and any amount that you pay back becomes accessible to you again. Unlike a personal loan, a line of credit permits you to write cheques and make bank machine withdrawals, and requires you to pay interest only on the funds that you actually use. Linear programmingTechnique for finding the maximum value of some equation subject to stated linear constraints. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |