Financial Glossary


N

National Association of Securities Dealers, Inc. (NASD). The nonprofit organization that regulates many components of the securities industry. Registration by the NASD as a broker-dealer is required for firms the buy and sell securities for customers.

National Association of Securities Dealers Automated Quotations (NASDAQ). Created in 1971, the Nasdaq was the world's first electronic stock market. The Nasdaq is a computerized system that facilitates trading and provides price quotations on some 5,000 of the more actively traded over-the-counter stocks. The term "Nasdaq" used to be capitalized "NASDAQ" as an acronym for National Association of Securities Dealers Automated Quotation. In recent times, the acronym was dropped, and Nasdaq is now used as a proper noun. The Nasdaq is traditionally home to many high-tech stocks. The big ones include Microsoft, Intel, Dell and Cisco.

Natural Rate of Unemployment. The lowest rate of unemployment that can occur before the scarcity of qualified workers will begin to boost wage growth and inflation. The core rate is best thought of as the percentage of the labour force that is either frictionally or structurally unemployed.

Net Asset Value (NAV). The value of all the holdings of a mutual fund, less the fund's liabilities. In terms of corporate valuations, the book value of assets less liabilities.

Net Asset Value Per Share. Net asset value of a mutual fund divided by the number of shares or units outstanding. This represents the base value of a share of unit of a fund and is commonly abbreviated to NAVPS.

Net Cash Flow. The overall direction of cash flow or money flow.

Net Capital Loss. To determine net capital loss, subtract allowable capital losses from taxable capital gains in the taxation year. Net capital losses can be carried back three years and carried forward seven.

Net Earnings. The profits after all expenses and taxes are deducted.

Net Income. A company's total revenues reduced by all of the costs of doing business, including depreciation, interest, taxes and other expenses.

Net Present Value (NPV). The current value of a particular investment's net cash flow, less the initial investment. A positive result indicates the investment should be made, otherwise, it should not be made. Put another way, NPV equals the present value of the expected future cash flows minus the present value of cash outflows.

Net Profit. The bottom line. This is how much money the company made in profits. It can also refer to net profit margin, which is a percentage telling you how many cents on each dollar is pure profit.

Net Profit Margin. Net income as a percentage of sales. You get this by dividing net income by sales. Since it's a percentage, it tells you how many cents on each dollar of sales is pure profit.

Net Sales. A company's total sales minus certain types of returns, allowances and discounts.

Net Trade Credit. The difference between a company's accounts receivable and its accounts payable. To the extent accounts receivable is greater than accounts payable, the company is a net provider of trade credit; otherwise, it is a user of trade credit. Put another way, the difference between the assets and liabilities of an individual or an entity. See Book Value.

Net Worth. The difference between the total value of your assets and possessions (such as your home, savings accounts, and investments) and your liabilities (such as your mortgages, credit cards, and school loans) is your net worth. For a corporation, net worth (or stockholder's equity) is the amount that the corporation's total assets exceed its total liabilities.

New York Stock Exchange (NYSE). The oldest American stock exchange. Companies have to meet certain criteria before they are included on the NYSE.

No-Shop Clause. An agreement between a potential buyer and the potential seller which prevents the seller from negotiating or discussing the sale of the business with others for a predetermined period of time.

New Issue. A stock or bond sold by a corporation for the first time. Proceeds maybe used to retire outstanding securities of the company, for new plant or equipment, or for additional working capital. New debt issues are also offered by government bodies. 

Non-Binding. Refers to an agreement between parties that can be terminated without penalty.

Non-Capital Loss. Losses incurred during the year from employment, business and property.

Non-Circumvent Agreement. It is a document to prevent those parties involved to disclose and circumvent the relevant parties to reach the end-buyer or end-seller. Put another way, each Party agrees not to directly or indirectly contact, deal with transact, or otherwise be involved with any corporation, partnership, proprietorships, trust, individuals, or other entities introduced by either Party without the specific written permission of the introducing Party. Often combined with a Non-Disclosure Agreement. See Non-Disclosure Agreement.

Non-Compete Agreement. An agreement that prevents the signer from engaging in competitive activities.

Non-Disclosure Agreement. An agreement that requires the signer to not divulge any stipulated information. Also called a confidential disclosure agreement (CDA), confidentiality agreement or secrecy agreement. Put another way, this is a legal contract between at least two parties which outlines confidential materials or knowledge the parties wish to share with one another for certain purposes, but wish to restrict from generalized use. In other words, it is a contract through which the parties agree not to disclose information covered by the agreement. An NDA creates a confidential relationship between the parties to protect any type of trade secret. As such, an NDA can protect non-public business information.

Non-Recurring Expenses. Expenses that are not expected to be incurred by a company in subsequent periods.

North American Industrial Classification System Code (NAICS). A numbering system established in 1997 by the U.S. Census Bureau, in cooperation with the U. S. Economic Classification Policy Committee, Statistics Canada and Mexico's Institutio Nacional de Estadistica Geografia e Informatics which is expected to replace the SIC code system.

Notary. A person authorized by the state (in which the person resides) to administer oaths (swearings to truth of a statement), take acknowledgements, certify documents, and to take depositions if the notary is also a court reporter. The signature and seal or stamp of a notary public is necessary to attest to the oath of truth of a person making an affidavit, and to attest that a person has acknowledged that he/she executed a deed, power of attorney or other document, and is required for recording in public records. The Secretary of State of each state appoints notaries public for a specified term of years.

Note. A debt security evidencing a debt which usually specifies the terms and conditions of the loan.