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Net investment |
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Definition of Net investmentNet investmentGross, or total, investment minus depreciation. Net Investmentinvestment spending minus depreciation.
Related Terms:Net present value of future investmentsThe present value of the total sum of NPVs expected to result from profitability index (Pl)a ratio that compares the present value of net cash flows to the present value of the net investment NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a European Monetary System (EMS)An exchange arrangement formed in 1979 that involves the currencies Expected return on investmentThe return one can expect to earn on an investment. See: capital asset 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. Foreign direct investment (FDI)The acquisition abroad of physical assets such as plant and equipment, with Future investment opportunitiesThe options to identify additional, more valuable investment opportunities Guaranteed investment contract (GIC)A pure investment product in which a life company agrees, for a International Monetary FundAn organization founded in 1944 to oversee exchange arrangements of International Monetary Market (IMM)A division of the CME established in 1972 for trading financial Investment analystsRelated: financial analysts Investment bankFinancial intermediaries who perform a variety of services, including aiding in the sale of Investment decisionsDecisions concerning the asset side of a firm's balance sheet, such as the decision to Investment grade bondsA bond that is assigned a rating in the top four categories by commercial credit Investment incomeThe revenue from a portfolio of invested assets. Investment managerAlso called a portfolio manager and money manager, the individual who manages a Investment product line (IPML)The line of required returns for investment projects as a function of beta Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment trustA closed-end fund regulated by the investment Company Act of 1940. These funds have a Investment valueRelated:straight value. InvestmentsAs a discipline, the study of financial securities, such as stocks and bonds, from the investor's Legal investmentsinvestments that a regulated entity is permitted to make under the rules and regulations Monetary goldGold held by governmental authorities as a financial asset. Monetary policyActions taken by the Board of Governors of the Federal Reserve System to influence the Monetary / non-monetary methodUnder this translation method, monetary items (e.g. cash, accounts Mutually exclusive investment decisionsinvestment decisions in which the acceptance of a project Net adjusted present valueThe adjusted present value minus the initial cost of an investment. Net advantage of refundingThe net present value of the savings from a refunding. Net advantage to leasingThe net present value of entering into a lease financing arrangement rather than Net advantage to mergingThe difference in total post- and pre-merger market value minus the cost of the merger. Net asset value (NAV)The value of a fund's investments. For a mutual fund, the net asset value per share Net assetsThe difference between total assets on the one hand and current liabilities and noncapitalized longterm Net benefit to leverage factorA linear approximation of a factor, T*, that enables one to operationalize the Net book valueThe current book value of an asset or liability; that is, its original book value net of any Net cash balanceBeginning cash balance plus cash receipts minus cash disbursements. Net changeThis is the difference between a day's last trade and the previous day's last trade. Net errors and omissionsIn balance of payments accounting, net errors and omissions record the statistical Net financing costAlso called the cost of carry or, simply, carry, the difference between the cost of financing Net floatSum of disbursement float and collection float. Net incomeThe company's total earnings, reflecting revenues adjusted for costs of doing business, Net leaseA lease arrangement under which the lessee is responsible for all property taxes, maintenance Net operating lossesLosses that a firm can take advantage of to reduce taxes. Net operating marginThe ratio of net operating income to net sales. Net periodThe 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 opportunitiesA model valuing a firm in which net present value of new Net present value ruleAn investment is worth making if it has a positive NPV. Projects with negative NPVs Net profit marginnet income divided by sales; the amount of each sales dollar left over after all expenses Net salvage valueThe after-tax net cash flow for terminating the project. Net working capitalCurrent assets minus current liabilities. Often simply referred to as working capital. Net worthCommon stockholders' equity which consists of common stock, surplus, and retained earnings. NettingReducing transfers of funds between subsidiaries or separate companies to a net amount. Netting outTo get or bring in as a net; to clear as profit. Passive investment strategySee: passive management. Passive investment managementBuying a well-diversified portfolio to represent a broad-based market Payments nettingReducing fund transfers between affiliates to only a netted amount. netting can be done on Reinvestment rateThe rate at which an investor assumes interest payments made on a debt security can be Reinvestment riskThe risk that proceeds received in the future will have to be reinvested at a lower potential REIT (real estate investment trust)Real estate investment trust, which is similar to a closed-end mutual REMIC (real estate mortgage investment conduit)A pass-through tax entity that can hold mortgages Return on investment (ROI)Generally, book income as a proportion of net book value. Safety-net returnThe minimum available return that will trigger an immunization strategy in a contingent Short-term investment servicesServices that assist firms in making short-term investments. SIMEX (Singapore International Monetary Exchange)A leading futures and options exchange in Singapore. Underinvestment problemThe mirror image of the asset substitution problem, wherein stockholders refuse Unit investment trustMoney invested in a portfolio whose composition is fixed for the life of the fund. Zero-investment portfolioA portfolio of zero net value established by buying and shorting component NET INCOMEThe profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales. NET SALES (revenue)The amount sold after customers’ returns, sales discounts, and other allowances are taken away from RATIO OF NET INCOME TO NET SALESA ratio that shows how much net income (profit) a company made on each dollar of net sales. Here’s the formula: RATIO OF NET SALES TO NET INCOMEA ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way: RETURN ON INVESTMENT (ROI)In its most basic form, the rate of return equals net income divided by the amount of money invested. It can be applied to a particular product or piece of equipment, or to a business as a whole. Investment centreA division or unit of an organization that is responsible for achieving an adequate return on Net present value (NPV)A discounted cash flow technique used for investment appraisal that calculates the present value of future cash flows and deducts the initial capital investment. Net profitSee operating profit. Return on investment (ROI)The net profit after tax as a percentage of the shareholders’ investment in the business. Net incomeThe last line of the Income Statement; it represents the amount that the company earned during a specified period. capital investment analysisRefers to various techniques and procedures net income (also called the bottom line, earnings, net earnings, and netoperating earnings) net present value (NPV)Equals the present value (PV) of a capital investment net worthGenerally refers to the book value of owners’ equity as reported return on investment (ROI)A very general concept that refers to some InvestmentThe commitment of funds (capital) in anticipation of an increased Net Present Value (NPV)The present value of all future cash inflows minus the present value approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a 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 centera responsibility center in which the manager investment decisiona judgment about which assets will be net cost of normal spoilagethe cost of spoiled work less the estimated disposal value of that work net present value (NPV)the difference between the present values of all cash inflows and outflows for an investment project net present value methoda process that uses the discounted net realizable value approacha method of accounting for by-products or scrap that requires that the net realizable value of these products be treated as a reduction in the cost of the primary products; primary product cost may be reduced by decreasing either net realizable value at split-off allocationa method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary network organizationa flexible organization structure that
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