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NASD
is National Association
of Securities Dealers.
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NASDAQ
is a computerized
system established by the NASD to facilitate trading by providing broker/dealers
with current bid and ask price quotes on over-the-counter stocks and some
listed stocks. Unlike the Amex and the NYSE, the NASDAQ (once an acronym
for the National Association of securities Dealers Automated Quotation
system) does not have a physical trading floor that brings together buyers
and sellers. Instead, all trading on the NASDAQ exchange is done over
a network of computers and telephones. Also, theNASDAQ does not employ
market specialists to buy unfilled orders like the NYSE does. The NASDAQ
began when brokers started informally trading via telephone; the network
was later formalized and linked by computer in the early 1970s. In 1998
the parent company of the NASDAQ purchased the Amex, although the two
continue to operate separately. Orders for stock are sent out electronically
on the NASDAQ, where market makers list their buy and sell prices. Once
a price is agreed upon, the transaction is executed electronically.
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NATURAL ACCOUNTS
in the
Chart of Accounts are user defined accounts for the activities associated
with the accounting entity that capture data at the transaction level.
Natural accounts exist for a range of Assets, Liabilities, Equity accounts,
Revenues, and Expenses.
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NATURAL BUSINESS YEAR
is a fiscal year
based on the cycle of the given business rather than a calendar year.
The year ends with inventories and activities at a low level, e.g., after
winter shipments for a ski manufacturer.
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NATURAL CLASSIFICATION
of costs focuses
on the nature of the cost item. In this classification structure, the
total operating costs of an activity can be classified into manufacturing
costs and commercial costs. Manufacturing costs include all direct materials
and direct labor, as well as, factory overhead. Such factory overhead
costs include indirect materials (such as factory supplies & lubricants),
indirect labor (such as supervision and inspection) and other indirect
costs (such as rent, insurance, and utilities). Commercial expenses include
marketing expenses (such as advertising, printing, and sales salaries)
and administrative (general and administrative (G&A)) expenses (such
as administrative office salaries, rent, and legal expenses).
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NCD
is Negotiable Certificate of Deposit.
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NEAR-CASH ASSETS
are non-cash assets
that can be readily exchanged for cash within a relatively short period
(e.g., short-term CD's and money market funds).
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NEBT
is Net Earning Before Taxes.
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NEGATIVE AMORTIZATION
is a loan repayment
schedule in which the outstanding principal balance of the loan increases,
rather than amortizing, because the scheduled monthly payments do not
cover the full amount required to amortize the loan. The unpaid Interest
is added to the outstanding principal, to be repaid later.
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NEGATIVE CASH FLOW
is where expenditures
required to maintain an investment exceed income received on the investment,
i.e. spending in a business is greater than earnings.
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NEGATIVE CONTRIBUTOR
is any item, activity,
or cost that offsets attainment of positive results, e.g., a rise in unemployment
and its effect upon the economy.
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NEGATIVE GOODWILL
arises
where the net assets at the date of acquisition, fairly valued, exceed
the cost of acquisition. It is reflected on the balance sheet net of
other intangible assets. Negative goodwill is recognized as income as
follows:
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NEGATIVE PLEDGE CLAUSE
is a covenant
or promise in an indenture agreement that states the corporation will
not pledge any of its assets if doing so would result in less security
to the debt holders covered under the indenture agreement. Also called
covenant of equal coverage.
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NEGATIVE WORKING CAPITAL
is when current
liabilities exceed current assets.
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NEGLIGENCE
is the omission to do something
which a reasonable man, guided by those ordinary considerations which
ordinarily regulate human affairs, would do, or the doing of something
which a reasonable and prudent man would not do.
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NEGOTIABLE INSTRUMENT
can be a check,
promissory note, bill of exchange, security or any document representing
money payable which can be transferred to another by handing it over
(delivery) and/or endorsing it (signing one's name on the back either
with no instructions or directing it to another). A negotiable instrument
is a contract and subject to the rules governing contract law. However,
a negotiable instrument may be distinguished from an ordinary contract
by the fact that a negotiable instrument may be written in a way that
makes it transferable. This quality of negotiation can generally allow
the instrument to be used as a substitute for money by holders in due
course,
despite the defensive claims between the original parties who drafted
the negotiable instrument. In order to be negotiable, the bill or note
must be payable to order, or to bearer. Some promissory notes contain
a clause(s) making them non-negotiable.
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NET 10, 30, etc.
usually refers to
payment terms on an invoice, e.g. 'Net 10 2%, 30', would mean that if
a purchaser pays the invoice within 10 days a 2% reduction in invoice
amount may be enjoyed, but full invoice amount is due within 30 days.
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NET ACCOUNTS RECEIVABLE
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NET ASSET VALUE (NAV)
in securities,
except money market funds which always have a NAV of $1.00, represents
the market value or price of one fund share. It is calculated by the total
value of the fund's portfolio less liabilities divided by the number of
shares; or, in corporate valuations, it is a measure of the shareholders’
aggregate wealth in the company, which is defined as the actual or hypothetical
market value of the company’s assets less its liabilities.
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NET ASSETS
is the difference between
total assets and current liabilities including noncapitalized long-term
liabilities.
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NET BOOK VALUE
is the current book
value of an asset or liability; i.e., its original book value net of any
accounting adjustments such as depreciation.
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NET CASH FLOW
equals cash receipts
minus cash payments over a given period of time; or equivalently, net
profit plus amounts charged off for depreciation, depletion, and amortization.
also called cash flow. Net cash flow is a measure of a company's financial
health.
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NET CURRENT ASSETS
see WORKING CAPITAL.
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NET DEBT
is: debt + short term loans
less cash on hand.
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NET EARNINGS
see NET PROFIT.
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NET INTEREST INCOME
see NET INTEREST MARGIN.
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NET INTEREST MARGIN
is the interest
income earned on assets less interest expense paid on liabilities and
capital. NET INTEREST MARGIN is the gross margin for financial institutions.
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NET LEASES
, typically, there are three net leases:
net lease, double-net lease, and triple-net lease. A net lease is a base
rent plus an additional charge for taxes. A double-net lease is a base
rent plus an additional charge for taxes and insurance. A triple-net lease
is base rent plus an additional charge for taxes, insurance, and common
area expenses.
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NET MARGIN
see NET PROFIT MARGIN.
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NET OF TAXES
means the effect of applicable
taxes (usually income taxes) has been considered in determining the overall
effect of an item on the financial statements. The phrase is used when
a company has items that must be disclosed in a separate section. Each
such item should be reported net of the applicable taxes.
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