Financial Terms “N”


Financial Terms Dictionary

N


Net Income

Net income is total revenues minus total expenses. If the revenues are larger, the result is net income. If the expenses are larger, the result is net loss.

net income formula

Net Loss

Net loss occurs when total expenses are larger than total revenues. If the revenues are larger, the result is net income.

net loss formula

Net Worth

The net worth of an individual is total assets minus total liabilities. For a company, net worth is called equity or stockholders’ equity.

net worth formula

Assume Maria has a savings account of $25,000 and investments of $75,000. Her car has a fair value of $20,000. Her debts total $50,000. Maria’s net worth is $70,000. See the example below.


Jeff Mankin

Jeff Mankin teaches financial literacy. His website is FinallyLearn.com.

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link to Expense

Expense

What is an expense? Expense is a cost to operate a business to produce revenue. In accounting, an expense occurs when an asset is used. This could include a cash outflow or consuming an...