What Is a Net Profits Interest? A net profits interest is an agreement that provides a payout of an operation’s net profits to the parties of the agreement. It is a non-operating interest that may be created when the owner of a property, typically an oil and gas property, leases it out to another party
What Is Net Receivables and How Is It Calculated? Net receivables are the total money owed to a company by its customers minus the money owed that will likely never be paid. Net receivables are often expressed as a percentage, and a higher percentage indicates a business has a greater ability to collect from its
What Is Net Sales? Net sales is the sum of a company’s gross sales minus its returns, allowances, and discounts. Net sales calculations are not always transparent externally. They can often be factored into the reporting of top line revenues reported on the income statement. Understanding Net Sales The income statement is the financial report
What Is Net Settlement? Net settlement is a bank’s routine resolution of the day’s transactions at the end of the business day. Since many or most bank transactions are now sent electronically, this is no longer a matter of counting the cash in the drawer. Instead, the bank has to add up all of their
What Is Netting? Netting entails offsetting the value of multiple positions or payments due to be exchanged between two or more parties. It can be used to determine which party is owed remuneration in a multiparty agreement. Netting is a general concept that has a number of more specific uses, including in the financial markets.
What Is Net Unrealized Appreciation? Some companies offer the benefit of employees owning stock in the employer company. The idea is that this creates an ownership mentality in the employees, even if they own a very small percentage of total shares. The net unrealized appreciation (NUA) is the difference in value between the average cost
What Is a Nest Egg? A nest egg is a substantial sum of money or other assets that have been saved or invested for a specific purpose. Such assets are generally earmarked for longer-term objectives, the most common being retirement, buying a home, and education. The term can also refer to money kept aside as
What Is Net Profit Margin? The net profit margin, or simply net margin, measures how much net income or profit is generated as a percentage of revenue. It is the ratio of net profits to revenues for a company or business segment. Net profit margin is typically expressed as a percentage but can also be represented in decimal form.
What Is Net Advantage to Leasing (NAL)? Net advantage to leasing (NAL) refers to the total monetary savings that would potentially result from a person or a business choosing to lease an asset as opposed to purchasing it outright. The benefits of leasing are usually determined by comparing the net present value of purchasing the
What Is Netback? Netback is a summary of all costs associated with bringing one unit of oil to the marketplace and the revenues from the sale of all the products generated from that same unit. It’s expressed as gross profit per barrel. Netback is calculated by taking the revenues from the oil, less all costs
