Net income
The company's total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses. |
Similar financial terms
Safety-net returnThe 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 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 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.
Earned income
The compensation from participation in a business, including normal remuneration (wages, salary and commissions) and bonuses.
Underwriting income
For an insurance company, the difference between the premiums earned and the costs of settling claims.
Taxable income
Gross income less a set of deductions such as allowances, deeds of covenants, and losses.
Spread income
Also called margin income, the difference between income and cost. For a depository institution, the difference between the assets it invests in (loans and securities) and the cost of its funds (deposits and other sources).
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven. The subsidiary relends the money to the parent.
Income Statement
This is company's accounting statement that shows its Income, Expenses, and Profit (or Loss) over a period of time. It is a picture of the financial performance of a company. It is sometimes referred to as a Profit & Loss (P&L) Statement. It allows a compay (or others) to compare its performance to that of other similar businesses. It tells shareholders how well their company is doing with respect to generating profits and earnings per share.
Premium income
The income made by an insurance company resulting from premiums paid for insurance products.
Effective gross income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.
Household income
The total level of income earned by all the households in the economy. This will be a significant part of the overall level of National Income.
National income
The value of goods and services created by a country in one year.
