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
What are Net Borrowed Reserves? Net Borrowed Reserves was one side of a statistic that was (until 2013) released in weekly Federal Reserve data showing the difference between the excess reserves banks held on account at the Fed and the liquid reserves the banks had borrowed from the Fed. When this difference (excess reserves—borrowings) was
What Is a Net Borrower? A net borrower is an entity that borrows more than it saves or lends out. Because many business entities both borrow and loan funds through various financial instruments and other means, it is the net difference between the amount borrowed and lent that is important and determines whether one is
What Is Net Cash? Net cash is a figure that is reported on a company’s financial statements. It is calculated by subtracting a company’s total liabilities from its total cash. The net cash figure is commonly used when evaluating a company’s cash flows. Net cash may also refer to the amount of cash remaining after
What Is a Net Charge-Off (NCO)? A net charge-off (NCO) is the dollar amount representing the difference between gross charge-offs and any subsequent recoveries of delinquent debt. Net charge-offs refer to the debt owed to a company that is unlikely to be recovered by that company. This “bad debt” often written off and classified as
What Is the Net Charge-Off Rate? The net charge-off rate is the annualized ratio of net charge-offs (NCOs) to average loans outstanding. NCOs are a lender’s gross charge-offs less recoveries of its delinquent debt. The net charge-off rate measures the proportion of debt owed to a company that is unlikely to be paid back to
What Is Net Debt? Net debt is a liquidity metric used to determine how well a company can pay all of its debts if they were due immediately. Net debt shows how much debt a company has on its balance sheet compared to its liquid assets. Net debt shows how much cash would remain if
What Is the Net Debt-to-EBITDA Ratio? The net debt-to-EBITDA (earnings before interest depreciation and amortization) ratio is a measurement of leverage, calculated as a company’s interest-bearing liabilities minus cash or cash equivalents, divided by its EBITDA. The net debt-to-EBITDA ratio is a debt ratio that shows how many years it would take for a company
