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Net profit margin |
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Definition of Net profit marginNet profit marginnet income divided by sales; the amount of each sales dollar left over after all expenses
Related Terms:NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay. After-tax profit marginThe ratio of net income to net sales. Before-tax profit marginThe ratio of net income before taxes to net sales. Book profitThe cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT. Buy on marginA transaction in which an investor borrows to buy additional shares, using the shares Contribution marginThe difference between variable revenue and variable cost. Dollar safety marginThe dollar equivalent of the safety cushion for a portfolio in a contingent immunization Effective margin (EM)Used with SAT performance measures, the amount equaling the net earned spread, or 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. Gross profit marginGross profit divided by sales, which is equal to each sales dollar left over after paying Initial margin requirementWhen buying securities on margin, the proportion of the total market value of 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 Maintenance margin requirementA sum, usually smaller than -but part of the original margin, which must MarginThis 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 Margin callA 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 MarginalIncremental. Marginal tax rateThe tax rate that would have to be paid on any additional dollars of taxable income earned. 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 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 investmentGross, or total, investment minus depreciation. 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 of future investmentsThe present value of the total sum of NPVs expected to result from Net present value ruleAn investment is worth making if it has a positive NPV. Projects with negative NPVs 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. Operating profit marginThe ratio of operating margin to net sales. Original marginThe margin needed to cover a specific new position. Related: margin, security deposit (initial) Payments nettingReducing fund transfers between affiliates to only a netted amount. netting can be done on Profit marginIndicator of profitability. The ratio of earnings available to stockholders to net sales. Profitability indexThe present value of the future cash flows divided by the initial investment. Also called Profitability ratiosRatios that focus on the profitability of the firm. profit margins measure performance Risk-adjusted profitabilityA probability used to determine a "sure" expected value (sometimes called a Safety-net returnThe minimum available return that will trigger an immunization strategy in a contingent SIMEX (Singapore International Monetary Exchange)A leading futures and options exchange in Singapore. Variation marginAn additional required deposit to bring an investor's equity account up to the initial margin GROSS PROFITThe profit a company makes before expenses and taxes are taken away. 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 PROFITWhat’s left over after you subtract the cost of goods sold and all your expenses from sales. 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: Controllable profitThe profit made by a division after deducting only those expenses that can be controlled by the Cost–volume–profit analysis (CVP)A method for understanding the relationship between revenue, cost and sales volume. Gross profitThe difference between the price at which goods or services are sold and the cost of sales. MarginThe 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. Marginal costThe cost of producing one extra unit. Margin of safetyA measure of the difference between the anticipated and breakeven levels of activity. 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. Operating profitThe 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. ProfitThe difference between income and expenses. Profit and Loss accountA financial statement measuring the profit or loss of a business – income less expenses – for an accounting period. Profit before interest and taxes (PBIT)See EBIT. Profit centreA division or unit of an organization that is responsible for achieving profit targets. Profitability indexSee cash value added. Retained profitsThe amount of profit after deducting interest, taxation and dividends that is retained by the business. Gross profitThe result of subtracting cost of goods sold from sales. Synonymous with gross margin. Net incomeThe last line of the Income Statement; it represents the amount that the company earned during a specified period. cash flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash contribution marginAn intermediate measure of profit equal to sales revenue gross margin, or gross profitThis first-line measure of profit 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 operating profitSee earnings before interest and income tax (EBIT). profitThe general term profit is not precisely defined; it may refer to net profit and loss statement (P&L statement)This is an alternative moniker profit moduleThis concept refers to a separate source of revenue and profit ratiosRatios based on sales revenue for a period. A measure of unit marginThe profit per unit sold of a product after deducting product Net Present Value (NPV)The present value of all future cash inflows minus the present value
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