Net asset value (NAV)

Similar financial terms

Safety-net return
The minimum available return that will trigger an immunization strategy in a contingent immunization strategy.

Payments netting
Reducing fund transfers between affiliates to only a netted amount. Netting can be done on a bilateral basis (between pairs of affiliates), or on a multi-lateral basis (taking all affiliates together).

Netting out
To get or bring in as a net; to clear as profit.

Netting
Reducing transfers of funds between subsidiaries or separate companies to a net amount.

Net worth
Common stockholders' equity which consists of common stock, surplus, and retained earnings.

Net working capital
Current assets minus current liabilities. Often simply referred to as working capital.

Net salvage value
The after-tax net cash flow for terminating the project.

Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.

Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs should be rejected.

Net present value of future investments
The present value of the total sum of NPVs expected to result from all of the firm's future investments.

Net present value of growth opportunities
A model valuing a firm in which net present value of new investment opportunities is explicitly examined.

Net present value (NPV)
The present value of the expected future cash flows minus the cost.

Net period
The period of time between the end of the discount period and the date payment is due.

Net operating margin
The ratio of net operating income to net sales.

Net operating losses
Losses that a firm can take advantage of to reduce taxes.

Net lease
A lease arrangement under which the lessee is responsible for all property taxes, maintenance expenses, insurance, and other costs associated with keeping the asset in good working condition.

Net investment
Gross, or total, investment minus depreciation.

Net income
The company's total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses.

Net float
Sum of disbursement float and collection float.

Net financing cost
Also called the cost of carry or, simply, carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.

Net errors and omissions
In balance of payments accounting, net errors and omissions record the statistical discrepancies that arise in gathering balance of payments data.

Net change
This is the difference between a day's last trade and the previous day's last trade.

Net cash balance
Beginning cash balance plus cash receipts minus cash disbursements.

Net book value
The current book value of an asset or liability; that is, its original book value net of any accounting adjustments such as depreciation.

Net benefit to leverage factor
A linear approximation of a factor, T*, that enables one to operationalize the total impact of leverage on firm value in the capital market imperfections view of capital structure.

Net assets
The difference between total assets on the one hand and current liabilities and noncapitalized longterm liabilities on the other hand.

Net advantage to merging
The difference in total post- and pre-merger market value minus the cost of the merger.

Net advantage to leasing
The net present value of entering into a lease financing arrangement rather than borrowing the necessary funds and buying the asset.

Net advantage of refunding
The net present value of the savings from a refunding.

Net adjusted present value
The adjusted present value minus the initial cost of an investment.

Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts payable and receivable, and long-term debt) are translated at the current rate while non-monetary items (e.g. inventory, fixed assets, and long-term investments) are translated at historical rates.

Monetary policy
Actions taken by the Board of Governors of the Federal Reserve System to influence the money supply or interest rates.

Monetary gold
Gold held by governmental authorities as a financial asset.

Cabinet security
A stock or bond listed on a major exchange with low daily traded volume.

Monetary neutrality
A proposition that in the long run, a percentage rise in the money supply is matched by the same percentage rise in the price level, leaving unchanged the real money supply and all other economic variables such as interest rates.

This theory, a core belief of classical economics, was first put forward in the 18th century by David Hume. He set out the classical dichotomy that economic variables come in two varieties, nominal and real, and that the things that influence nominal variables ...

Net interest margin (NIM)
The difference between interest income and interest expense as a percentage of assets.

Net national product
The technical term for national income, it is GNP minus capital consumption.

High Net Worth (HNW) Person
An individual with more than $1,000,000 in liquid assets to manage.

Assets
Anything that the firm owns. In the balance sheet, assets are divided into intangible assets and tangible assets.

Current Assets
The value of assets held at the Balance Sheet date that are represented by cash, or can be expected to be converted into cash within the next 12 months.

Deferred assets
Payments that will be assigned as expenses in a later period, but that are paid in advance and temporarily set up as assets on the balance sheet.

Fixed assets
Alternative name for noncurrent assets.

Acquisition of assets
A merger or consolidation in which an acquirer purchases the selling firm's assets.

Wasting asset
An asset which has a limited life and thus, decreases in value (depreciates) over time. Also applied to consumed assets, such as gas, and termed "depletion."

Total asset turnover
The ratio of net sales to total assets.

Thus, the total asset turnover ratio compares the turnover with the assets that the business has used to generate that turnover.

In other words, we are just saying that for every 1 of assets, the turnover is x.

Tangible asset
An asset whose value depends on particular physical properties. These i nclude reproducible assets such as buildings or machinery and non-reproducible assets such as land, a mine, or a work of art. Also referred to as real assets.

Tactical Asset Allocation
Tactical Asset Allocation (TAA) is an asset allocation strategy that allows active departures from the normal asset mix based upon rigorous objective measures of value. Often called active management. It involves forecasting asset returns, volatilities and correlations. The forecasted variables may be functions of fundamental variables, economic variables or even technical variables.

Risk-free asset
An asset whose future return is known today with certainty.

Risky asset
An asset whose future return is uncertain.

Return on total assets
The ratio of earnings available to common stockholders to total assets.

Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets).

Residual assets
Assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.

Reproducible assets
A tangible asset with physical properties that can be reproduced, such as a building or machinery.

Real assets
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a financial obligation.

Quick assets
Current assets minus inventories.

Publicly traded assets
Assets that can be traded in a public market, such as the stock market.

Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an appropriate long-term "normal" asset mix that represents an ideal blend of controlled risk and enhanced return.

Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due within 1 year.

Non-reproducible assets
A tangible asset with unique physical properties, like a parcel of land, a mine, or a work of art.

Long-term assets
Value of property, equipment and other capital assets minus the depreciation. This is an entry in the bookkeeping records of a company, usually on a "cost" basis and thus does not necessarily reflect the market value of the assets.

Liquid asset
Asset that is easily and cheaply turned into cash - notably cash itself and short-term securities.

Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.

Asset Protection Trust (APT)
A special form of irrevocable trust, usually created (settled) offshore for the principal purposes of preserving and protecting part of one's wealth offshore against creditors. Title to the asset is transferred to a person named the trustee. Generally used for asset protection and usually tax neutral. Its ultimate function is to provide for the beneficiaries of the APT.

Admitted Assets
Assets admitted by state law to be included in an insurance company's annual statement. These assets are an important item when regulators measure insurance company solvency. They may include mortgages, stocks, bonds and real estate.

Principal value
The amount that the issuer of a bond agrees to repay the bondholder at the maturity date. The principal is also referred to redemption value, maturity value, par value or face value.

Back-end value
The amount paid to remaining shareholders in the second stage of a two-tier or partial tender offer.

Going-concern value
The value of a company as a whole over and above the sum of the values of each of its parts; the value of organization learning and reputation.

Terminal value
The value at maturity.

Book value per share
The intrinsic value of a company's stock. BVPS is calculated by dividing tangible capital dollar value by the number of outstanding shares of common stock.

Face value
Alternative name for par value.

Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leverage buy-out.

Value manager
A manager who seeks to buy stocks that are at a discount to their "fair value" and sell them at or in excess of that value. Often a value stock is one with a low price to book value ratio.

Value dating
Refers to when value or credit is given for funds transferred between banks.

Value date
In the market for eurodollar deposits and foreign exchange, value date refers to the delivery date of funds traded. Normally it is on spot transactions two days after a transaction is agreed upon and the future date in the case of a forward foreign exchange trade.

Value additivity principal
Prevails when the value of a whole group of assets exactly equals the sum of the values of the individual assets that make up the group of assets. Stated differently, the principle that the net present value of a set of independent projects is just the sum of the net present values of the individual projects.

Value-at-Risk
A value-at-risk (VAR) model is a procedure for estimating the probability of portfolio losses exceeding some specified proportion based on a statistical analysis of historical market price trends, correlations, and volatilities.

Value-added tax
Value-added tax (VAT) is a method of indirect taxation whereby a tax is levied at each stage of production on the value added at that specific stage.

Utility value
The welfare a given investor assigns to an investment with a particular return and risk.

Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar received today can earn interest up until the time the future dollar is received.

Time value of an option
The portion of an option's premium that is based on the amount of time remaining until the expiration date of the option contract, and that the underlying components that determine the value of the option may change during that time. Time value is generally equal to the difference between the premium and the intrinsic value.

Straight value
Also called investment value, the value of a convertible security without the con-version option.

Standardized value
Also called the normal deviate, the distance of one data point from the mean, divided by the standard deviation of the distribution.

Salvage value
Scrap value of plant and equipment.

Residual value
Usually refers to the value of a lessor's property at the time the lease expires.

Replacement value
Current cost of replacing the firm's assets.

Relative value
The attractiveness measured in terms of risk, liquidity, and return of one instrument relative to another, or for a given instrument, of one maturity relative to another.

Price value of a basis point (PVBP)
Also called the dollar value of a basis point, a measure of the change in the price of the bond if the required yield changes by one basis point.

Present value of growth opportunities (PVGO)
The net present value (NPV) of investments the firm is expected to make in the future.

Present value factor
Factor used to calculate an estimate of the present value of an amount to be received in a future period.

Present value
The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future.

Par value
Also called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date.

Original face value
The principal amount of the mortgage as of its issue date.

Market value-weighted index
An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, with the weights proportional to outstanding market value.

Market value ratios
Ratios that relate the market price of the firm's common stock to selected financial statement items.

Market value
(a) The price at which a security is trading and could presumably be purchased or sold. (b) The value investors believe a firm is worth; calculated by multiplying the number of shares outstanding by the current market price of a firm's shares.

Loan value
The amount a policyholder may borrow against a whole life insurance policy at the interest rate specified in the policy.

Liquidation value
Net amount that could be realized by selling the assets of a firm after paying the debt.

Bond value
With respect to convertible bonds, the value the security would have if it were not convertible apart from the conversion option.

Book value
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A company's book value might be more or less than its market value.

Cash-surrender value
An amount the insurance company will pay if the policyholder ends a whole life insurance policy.

Conversion value
Also called parity value, the value of a convertible security if it is converted immediately.

Embedded value
A methodology that reflects future shareholder profits in the life insurance business. Embedded value equals the free surplus plus the value of inforce business. Embedded value is hard to compare with different companies since each company determines its own input parameters, for example the level of target surplus.

Salvage Value
Is the amount remaining after a depreciated useful life. It refers to the residual or recoverable value of a depreciated asset. It should be noted that the gross salvage value may be adjusted by a removal or disposal cost. This adjustment would lower the gross salvage value.

Extrinsic Value
The time value component of an option premium.