Net benefit to leverage factor

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

Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed end fund, the market price may vary significantly from the net asset value.

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.

Accumulated Benefit Obligation (ABO)
An approximate measure of the liability of a plan in the event of a termination at the date the calculation is performed. Related: projected benefit obligation.

Unit benefit formula
Method used to determine a participant's benefits in a defined benefit plan by multiplying years of service by the percentage of salary.

Projected benefit obligation (PBO)
A measure of a pension plan's liability at the calculation date assuming that the plan is ongoing and will not terminate in the foreseeable future.

Pension Benefit Guaranty Corporation (PBGC)
A federal agency that insures the vested benefits of pension plan participants (established in 1974 by the ERISA legislation).

Cost-benefit ratio
The net present value of an investment divided by the investment's initial cost. Also called the profitability index.

Unleveraged required return
The required return on an investment when the investment is financed entirely by equity (i.e. no debt).

Unleveraged beta
The beta of an unleveraged required return (i.e. no debt) on an investment when the investment is financed entirely by equity.

Operating leverage
Fixed operating costs, so-called because they accentuate variations in profits.

Leveraged required return
The required return on an investment when the investment is financed partially by debt.

Leveraged portfolio
A portfolio that includes risky assets purchased with funds borrowed.

Leveraged lease
A lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset and grants the lender a lien on the assets and a pledge of the lease payments to secure the borrowing.

Leveraged equity
Stock in a firm that relies on financial leverage. Holders of leveraged equity face the benefits and costs of using debt.

Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use of debt funds: bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an LBO through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an LBO fund ...

Leveraged beta
The beta of a leveraged required return; that is, the beta as adjusted for the degree of leverage in the firm's capital structure.

Leverage rebalancing
Making transactions to adjust (rebalance) a firm's leverage ratio back to its target.

Leverage ratios
Measures of the relative contribution of stockholders and creditors, and of the firm's ability to pay financing charges. Value of firm's debt to the total value of the firm.

Leverage clientele
A group of shareholders who, because of their personal leverage, seek to invest in corporations that maintain a compatible degree of corporate leverage.

Leverage
The use of debt financing.

Amortization factor


Two-factor model
Black's zero-beta version of the capital asset pricing model.

Single factor model
A model of security returns that acknowledges only one common factor.

Reported factor
The pool factor as reported by the bond buyer for a given amortization period.

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

Pool factor
The outstanding principal balance divided by the original principal balance with the result expressed as a decimal. Pool factors are published monthly by the Bond Buyer newspaper for Ginnie Mae, Fannie Mae, and Freddie Mac(Federal Home Loan Mortgage Corporation) MBSs.

One-factor APT
A special case of the arbitrage pricing theory that is derived from the one-factor model by using diversification and arbitrage. It shows the expected return on any risky asset is a linear function of a single factor.

Old-line factoring
Factoring arrangement that provides collection, insurance, and finance for accounts receivable.

Multifactor CAPM
A version of the capital asset pricing model derived by Merton that includes extramarket sources of risk referred to as factor.

Maturity factoring
Factoring arrangement that provides collection and insurance of accounts receivable.

Conversion factors
Rules set by the Chicago Board of Trade for determining the invoice price of each acceptable deliverable Treasury issue against the Treasury Bond futures contract.

Factor market
The place where inputs or resources are bought or sold. Factor markets usually refer to labor or capital.