What Is an After-Tax Contribution? An after-tax contribution is money paid into a retirement or investment account after income taxes on those earnings have already been deducted. When opening a tax-advantaged retirement account, an individual may choose to defer the income taxes owed until after retiring, if it is a traditional retirement account, or pay
What Is an After-Tax Profit Margin? An after-tax profit margin is a financial performance ratio calculated by dividing net income by net sales. A company’s after-tax profit margin is significant because it shows how well a company controls its costs. The after-tax profit margin is the same as the net profit margin. Understanding Profit Margin
What Is the After-Tax Real Rate of Return? The after-tax real rate of return is the actual financial benefit of an investment after accounting for the effects of inflation and taxes. It is a more accurate measure of an investor’s net earnings after income taxes have been paid and the rate of inflation has been
What Is After-Tax Return on Assets? After-tax return on assets (ROA) is a financial ratio used to measure after-tax income earned by a company from its assets. After-tax ROA compares after-tax income to average total assets (ATA) and is expressed as a percentage. A company that earned $100 of after-tax income on $400 of ATA
What Is an Against Actual Transaction? The term “against actual” refers to a type of transaction regularly carried out in the commodities futures markets. In an against actual transaction, holders of opposing futures contracts for the same commodity agree to settle their respective contracts by exchanging them with one-another along with a payment based on
What Is Aktiengesellschaft (AG)? AG is an abbreviation of Aktiengesellschaft, which is a German term for a public limited company. This type of company shares are offered to the general public and traded on a public stock exchange. Shareholders’ liability is limited to their investment. The shareholders are not responsible for the company’s debts, and their assets are
What Is an Advance Premium Fund? An advance premium fund exists when insurance companies who receive advance premiums must account for the unearned portion of these premiums as a separate liability item on their balance sheets. This item is commonly referred to as the advance premium fund or advance premium account. Once the premium is
DEFINITION of Advance Premium Mutual An advance premium mutual insurance company that assesses premiums in advance at an amount that does not change for a stated period of time. This is different from an assessment insurer which assesses policyholders their premiums based on actual loss and expense experience of the company. BREAKING DOWN Advance Premium
What Is an Advance Rate? An advance rate is the percentage of the value of the collateral that a lender is willing to extend as a loan. The advance rate helps a borrower determine what kind of collateral to bring to the table to secure the desired loan amount and helps minimize a lender’s loss exposure
What Is an Adverse Action? In finance, the term “adverse action” refers to a type of notice given by a lender when a borrower’s credit application has been denied. They are typically delivered within seven to 10 business days following the decision to deny the loan application, usually in writing, although they may be communicated
