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Glossary Terms

Net Earnings

Refers to after-tax net income, sometimes known as the bottom line or a company’s profits. Net Earnings are the main determinant of a company’s share price, because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. See Earnings.

Net Present Value (NPV)

The value, as of a specified date, of future cash inflows less all cash outflows (including the cost of investment) calculated using an appropriate discount rate. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.

Net Profit

Total revenues less all expenses and other deductible items. Should be identified as pre-tax or post tax.

Net Tangible Asset Value

The value of the business enterprise’s tangible assets (excluding excess assets and non-operating assets) minus the value of its liabilities.

Net Worth

Total assets minus total liabilities, as reflected by the balance sheet. Synonymous with net book value or owner’s equity.

Networking

The exchange of information and ideas among people with a common profession or special interest, usually in an informal social setting.

Normalized Earnings

Economic benefits adjusted for nonrecurring, non-economic or other unusual items to eliminate anomalies and/or facilitate comparisons.

Normalized Financial Statements

Financial statements adjusted for non-operating assets and liabilities and/or for non-recurring, non-economic or other unusual items to eliminate anomalies and/or facilitate comparisons