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NPV (net present value of cash flows) |
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Definition of NPV (net present value of cash flows)NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay.
Related Terms:PV (present value of cash flows)the value in todayâ€™s dollars of cash flows that occur in different time periods. Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity Bond valueWith respect to convertible bonds, the value the security would have if it were not convertible Book valueA company's book value is its total assets minus intangible assets and liabilities, such as debt. A Book value per shareThe ratio of stockholder equity to the average number of common shares. Book value Carrying valueBook value. CashThe value of assets that can be converted into cash immediately, as reported by a company. Usually Cash budgetA forecasted summary of a firm's expected cash inflows and cash outflows as well as its Cash and carryPurchase of a security and simultaneous sale of a future, with the balance being financed Cash and equivalentsThe value of assets that can be converted into cash immediately, as reported by a Cash commodityThe actual physical commodity, as distinguished from a futures contract. Cash conversion cycleThe length of time between a firm's purchase of inventory and the receipt of cash Cash cowA company that pays out all earnings per share to stockholders as dividends. Or, a company or Cash cycleIn general, the time between cash disbursement and cash collection. In net working capital Cash deficiency agreementAn agreement to invest cash in a project to the extent required to cover any cash Cash deliveryThe provision of some futures contracts that requires not delivery of underlying assets but Cash discountAn incentive offered to purchasers of a firm's product for payment within a specified time Cash dividendA dividend paid in cash to a company's shareholders. The amount is normally based on Cash equivalentA short-term security that is sufficiently liquid that it may be considered the financial Cash flowIn investments, it represents earnings before depreciation , amortization and non-cash charges. Cash flow after interest and taxesnet income plus depreciation. Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Cash flow from operationsA firm's net cash inflow resulting directly from its regular operations Cash flow matchingAlso called dedicating a portfolio, this is an alternative to multiperiod immunization in Cash flow per common sharecash flow from operations minus preferred stock dividends, divided by the Cash flow time-lineLine depicting the operating activities and cash flows for a firm over a particular period. Cash-flow break-even pointThe point below which the firm will need either to obtain additional financing Cash management billVery short maturity bills that the Treasury occasionally sells because its cash Cash marketsAlso called spot markets, these are markets that involve the immediate delivery of a security Cash offerA public equity issue that is sold to all interested investors. Cash ratioThe proportion of a firm's assets held as cash. Cash settlement contractsFutures contracts, such as stock index futures, that settle for cash, not involving Cash transactionA transaction where exchange is immediate, as contrasted to a forward contract, which Cash-equivalent itemsTemporary investments of currently excess cash in short-term, high-quality Cash-surrender valueAn amount the insurance company will pay if the policyholder ends a whole life CashoutRefers to a situation where a firm runs out of cash and cannot readily sell marketable securities. Committee, AIMR Performance Presentation Standards Implementation CommitteeThe Association for Investment Management and Research (AIMR)'s Performance presentation Standards Implementation Conversion valueAlso called parity value, the value of a convertible security if it is converted immediately. Discounted cash flow (DCF)Future cash flows multiplied by discount factors to obtain present values. Discretionary cash flowcash flow that is available after the funding of all positive npv capital investment Equivalent annual cash flowAnnuity with the same net present value as the company's proposed investment. European Monetary System (EMS)An exchange arrangement formed in 1979 that involves the currencies Exercise valueThe amount of advantage over a current market transaction provided by an in-the-money Expected future cash flowsProjected future cash flows associated with an asset of decision. Expected valueThe weighted average of a probability distribution. Expected value of perfect informationThe expected value if the future uncertain outcomes could be known Exposure nettingOffsetting exposures in one currency with exposures in the same or another currency, Extraordinary positive valueA positive net present value. Face valueSee: Par value. Firm's net value of debtTotal firm value minus total firm debt. Free cash flowscash not required for operations or for reinvestment. Often defined as earnings before Future valueThe amount of cash at a specified date in the future that is equivalent in value to a specified General cash offerA public offering made to investors at large. Incremental cash flowsDifference between the firm's cash flows with and without a project. 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 Intrinsic value of an optionThe amount by which an option is in-the-money. An option which is not in-themoney Intrinsic value of a firmThe present value of a firm's expected future net cash flows discounted by the Investment valueRelated:straight value. Ledger cashA firm's cash balance as reported in its financial statements. Also called book cash. Liquidation valuenet amount that could be realized by selling the assets of a firm after paying the debt. Loan valueThe amount a policyholder may borrow against a whole life insurance policy at the interest rate Market value1) The price at which a security is trading and could presumably be purchased or sold. Market value ratiosRatios that relate the market price of the firm's common stock to selected financial Market value-weighted indexAn index of a group of securities computed by calculating a weighted average Maturity valueRelated: par value. 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 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. Nominal cash flowA cash flow expressed in nominal terms if the actual dollars to be received or paid out are given.
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