Net profit margin is a measure of a company’s profitability, calculated as the ratio of net profit (after all expenses and taxes) to total earnings. It indicates the percentage of revenue that remains as profit after all operational and other expenses are deducted. Thus, you may use this figure to assess a company’s efficiency of …
Post Type Archives: Glossary
Net Worth Meaning
You can understand your or a company’s financial strength by calculating net worth. The net worth definition is pretty simple: it is the total value of assets subtracted from the total liabilities. Here, assets refer to cash in your bank accounts, properties and other assets (like cars or gold) that you own or investments that …
Nominal
Nominal refers to a value that is not adjusted for inflation or other factors. It represents the actual, current value of an asset or liability without considering changes in purchasing power over time.For example, a nominal salary may be stated as ₹50,000 per month without accounting for inflation or cost of living adjustments.
Online Banking
Online banking, meaning internet or web banking, is very common now and enables you to carry out financial transactions through internet or digitally using your computer or smartphone. Online banking provides the same services that you get at a bank’s physical branch. Nowadays, most banks offer this facility through their website or mobile application, which …
Overhead Expenses
Usually, a stakeholder, investor or financial planner may want to know what are overhead expenses when it comes to your business. The answer is simple. Overhead expenses refer to business expenses that are not directly related to a product or service manufactured or offered by the business. Calculating overhead expenses is essential since it allows …
Pay-off meaning
The pay-off definition as per the Cambridge Dictionary is ‘to pay back money that you owe’. This term is usually used in the context of paying off a loan and means that you have serviced your debt obligation in full. Your pay-off amount refers to the total amount you need to pay, including your principal …
Payroll Card
In some organisations, you may come across this term and wonder, what is payroll card? It is a reloadable prepaid card that your employer uses to pay your salary on your payday. These cards come with numerous benefits, including wide acceptance. You can use these cards wherever electronic payments work. They also offer convenience since …
Personal Guarantee
A personal guarantee is taking responsibility for another person’s debt in the event that they are unable to repay it. Sometimes, when lenders are unsure of a borrower’s ability to repay debt on time, they may require a guarantor to sign the loan agreement to decrease their lending risk.
Prepaid Credit Card
A prepaid credit card refers to a payment card that you can preload with a specific amount. You can perform various financial transactions with this card, like purchases, bill payments, cash withdrawals, etc. It is different from debit and credit cards because instead of borrowing funds or using funds from your bank account, you use …
Prepayment
Prepayment is the payment you make over and above the regular EMIs you pay during the repayment of a loan. A prepayment may be in part or full which is called part-prepayment or foreclosure, respectively. Prepayment helps you pay off the early and become debt-free faster. It also reduces the total interest you pay on …