Page 717 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

702 The Complete Guide to Executive Compensation

net earnings See net income.
net earnings growth Increase in dollars and/or percentage over the previous financial period.
net earnings to sales ratio Income after taxes divided by sales, reflecting the portion of every sales
dollar that is retained (before dividends).
net income The after-tax income appearing on the income statement.
net income growth See net earnings growth.
net income to shareholder equity ratio Net income divided by shareholder equity, representing the
relationship of net income to shareholder equity.
net loss When net income is a minus.
net operating profit after taxes (NOPAT) Operating income (EBIT) minus taxes.
net profit See net income.
net profit on sales Net income divided by net sales, indicating the rate of return on sales.
net revenue See net sales.
net sales Gross sales less returns, allowances, and discounts.
net worth The difference between assets and liabilities. For a company, this is shareholder equity.
net worth growth Increase in shareholder equity over the previous year.
new economy companies High-tech companies in the threshold and growth stages. See old
economy companies.
New York Stock Exchange (NYSE) The largest stock exchange in the world; often called the Big
Board. It is a secondary market for buying and selling stock; that is, the company is not directly involved
in the transactions.
next-in-first-out (NIFO) Accounting principle to measure what has been sold and what remains in
inventory; in this situation indicating that the order of inventory movement will begin with product
produced before it gets to inventory.
NIFO See next-in-first-out.
no-fault insurance Benefits payable regardless of who is at fault.
no-load fund A mutual fund that charges a fee based on assets rather than a front- or back-end load.
nominal interest rate The specified interest rate before adjustment for compounding.
noncompensatory stock option Under APB 25, those options that were intended to raised capital
and/or diversify ownership among a company’s employees.
noncompete agreement Either a self-standing document or part of an employment agreement
whereby the individual agrees not to enter into an arrangement that would be deemed competing after
leaving the company. Typically, the contract specifies period of time and other limitations.
noncontributory plan A program paid completely by the company.
noncurrent assets Company-owned property with a useful life of more than one year.
noncurrent liabilities Financial obligations due to be paid more than a year in the future.
nondiscounted stock option A stock option offered at current fair market value.
nonduplication rule Amount once taxed will not be subject to taxation when received.
non-exempt employee Individuals who are covered by the Fair Labor Standards Act minimum wage
and overtime provisions.
nonforfeitable benefit A benefit in which the individual is completely and immediately 100 percent
vested.