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Definition of Net profit
See operating profit.
net income divided by sales; the amount of each sales dollar left over after all expenses
An entity within a corporation against which both revenues and costs are
net profits kept to accumulate in a business after dividends are paid.
The net profit after tax as a percentage of the shareholders’ investment in the business.
The ratio of net income to net sales.
a method of allocating joint cost to joint products using a
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.
This equals the cash inflow from sales during the period minus the cash
The profit made by a division after deducting only those expenses that can be controlled by the
A method for understanding the relationship between revenue, cost and sales volume.
analysis a procedure that examines
An exchange arrangement formed in 1979 that involves the currencies
Offsetting exposures in one currency with exposures in the same or another currency,
Total firm value minus total firm debt.
gross margin, or gross profit
This first-line measure of profit
The profit a company makes before expenses and taxes are taken away.
The difference between the price at which goods or services are sold and the cost of sales.
The result of subtracting cost of goods sold from sales. Synonymous with gross margin.
Revenue less cost of goods sold.
Gross profit margin
Gross profit divided by sales, which is equal to each sales dollar left over after paying
Gross Profit Margin
Gross profit divided by revenue.
International Monetary Fund
An 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 model
a model that involves
a mechanism for sharing information and delivering data from corporate databases to the local-area network (LAN) desktops
School of economic thought stressing the importance of the money supply in the economy. Adherents believe that the economy is inherently stable, so that policy is best undertaken through adoption of a policy rule.
Proposal that the money supply be increased at a steady rate equal approximately to the real rate of growth of the economy. Contrast with discretionary policy.
Any measure of the economy's money supply.
See money base.
Gold held by governmental authorities as a financial asset.
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Actions taken by the central bank to change the supply of money and the interest rate and thereby affect economic activity.
Monetizing the Debt
See printing money.
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.
net asset value
The value of all the holdings of a mutual fund, less the fund's liabilities.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
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 after Operations
Cash flow available for debt service—the payment of interest and principal on loans. Generally calculated as cash provided by operating activities before interest
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 cost of normal spoilage
the cost of spoiled work less the estimated disposal value of that work
Net Domestic Product
GDP minus depreciation.
Net errors and omissions
In balance of payments accounting, net errors and omissions record the statistical
Exports minus imports.
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.
Difference between payment float and availability float.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
The profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales.
The last line of the Income Statement; it represents the amount that the company earned during a specified period.
The excess of revenues over expenses, including the impact of income taxes.
net income (also called the bottom line, earnings, net earnings, and net
The current inventory balance, less allocated or reserved items.
Gross, or total, investment minus depreciation.
Investment spending minus depreciation.
A lease arrangement under which the lessee is responsible for all property taxes, maintenance
Net National Product
GNP minus depreciation.
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 amount of an employee’s wages payable after all tax and other deductions have been removed.
The period of time between the end of the discount period and the date payment is due.
Net present value
A discounted cash flow methodology that uses a required rate of
net present value method
a process that uses the discounted
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
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 present value (NPV)
Equals the present value (PV) of a capital investment
Net Present Value (NPV)
The present value of all future cash inflows minus the present value
net present value (NPV)
the difference between the present values of all cash inflows and outflows for an investment project
net present value (NPV)
Present value of cash flows minus initial investment.
Net Present Value (NPV) Method
A method of ranking investment proposals. NPV is equal to the present value of the future returns, discounted at the marginal cost of capital, minus the present value of the cost of the investment.
Net present value of future investments
The present value of the total sum of NPVs expected to result from
Net present value of growth opportunities
A model valuing a firm in which net present value of new
Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs
Net Realizable Value
Selling price of an asset less expenses of bringing the asset into a saleable state and expenses of the sale.
net realizable value approach
a 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 allocation
a method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary
Net realizeable value
The expected revenue to be gained from the sale of an item or
Total revenue, less the cost of sales returns, allowances, and discounts.
NET SALES (revenue)
The amount sold after customers’ returns, sales discounts, and other allowances are taken away from
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.
net working capital
Current assets minus current liabilities.
Common stockholders' equity which consists of common stock, surplus, and retained earnings.
Generally refers to the book value of owners’ equity as reported
Book value of common stockholders’ equity plus preferred stock.
The difference between the total assets and total liabilities of a company. Note: The value of the preferred shares is deducted from the net worth because the preferred's are usually redeemed before any value is paid to the common shareholders.
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 flexible organization structure that
NPV (net present value of cash flows)
Same as PV, but usually includes a subtraction for an initial cash outlay.
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.
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