N

NON-SUFFICIENT FUNDS (NSF)

An action by a bank whereby the bank refuses payment of a check that has been presented for payment. This usually means that the issuer of a check did not have enough money in the account to honor payment of the check. The check is boldly stamped NSF, returned to the payee’s bank where the amount of the check is debited from the payee’s account, a fee is charged to the payee and the NSF check is returned to the payee.

NAFTA

See NORTH AMERICAN FREE TRADE AGREEMENT.

NAME, FICTITIOUS

See FICTITIOUS NAME.

NAME, RESERVATION OF

The exclusive right to the use of a trade name, fictitious name or a corporate name. Reservation is made by filing the proper application with a state authority and paying the appropriate fee.

NASD

The National Association of Securities Dealers, a trade group for regulating investments in small company stocks.

NASDAQ

The National Association of Securities Dealers Automated Quotation system, a stock market system for buying and selling small-company stocks.

NATIONAL BUSINESS INCUBATOR ASSOCIATION (NBIA)

A not-for-profit organization that promotes the establishment and successful operation of INCUBATORS as an avenue to assist start-up entrepreneurs, especially in new technology. A business that starts in an incubator has a measurably better chance of survival.

NATIONAL FEDERATION OF INDEPENDENT BUSINESS (NFIB)

The nation’s largest advocacy organization for small and independent businesses.

NATIONAL LABOR RELATIONS BOARD (NLRB)

A federal government agency that administers laws concerning labor relations.

NBIA

See NATIONAL BUSINESS INCUBATOR ASSOCIATION.

NEGATIVE CASH FLOW

See CASH FLOW.

NEGOTIABLE

In banking, a financial document that can be easily converted into cash, such as a check or promissory note when properly endorsed or properly delivered. In business, something that can be sold or transferred to another party in exchange for money or settlement of an obligation. A matter of mutual concern between one or more parties that can be resolved to the satisfaction of all parties.

NEGOTIABLE INSTRUMENT

An unconditional order or promise to pay an amount of money on demand, easily transferable from one person to another, such as a check, draft, promissory note or stock certificate. Must meet the UNIFORM COMMERCIAL CODE.

NEGOTIABLE PAPER

Common expression for NEGOTIABLE INSTRUMENT.

NEGOTIATE

To confer, bargain or discuss a business item with the intent of reaching an agreement. Or to discuss with a view to settle or conclude a business transaction. In banking, to transfer, assign or sell, such as NEGOTIABLE PAPER.

NEGOTIATION

Conferring, discussing or bargaining to reach an agreement.

NET

The opposite of GROSS. See the definition for the precise business term in question. See also GROSS. In business in a general sense, the term means what is left over after deducting other amounts, i.e., net income or net assets.

NET ASSETS

The difference between a company’s total assets and its total liabilities. Another way of saying OWNER’S EQUITY or NET WORTH, since the subtraction results in a value of assets equal to the net worth.

NET CURRENT ASSETS

CURRENT ASSETS less CURRENT LIABILITIES; another name for WORKING CAPITAL. See WORKING CAPITAL. NET EARNINGS See NET INCOME.

NET FIXED ASSETS

On a BALANCE SHEET, the cost of assets minus the depreciation expense incurred to date.

NET INCOME (OR LOSS)

On an INCOME STATEMENT the sum remaining after all EXPENSES have been deducted from INCOME; called NET INCOME, NET EARNINGS or NET PROFIT. When the value is positive it is called NET PROFIT. When the value is negative it is called NET LOSS. For a business, total SALES less COST OF GOODS SOLD and less OVERHEAD and other expenses. Net income is usually specified whether income taxes have been deducted (NET INCOME BEFORE TAXES) or provisions made for payment of income taxes (NET INCOME AFTER TAXES). Net income after taxes is the amount earned by the owners of the business; in the vernacular, the BOTTOM LINE. For an individual, gross income less expenses incurred to produce the income. Usually, expenses incurred for the production of income are deductible for tax purposes.

NET INCOME AFTER TAXES

See NET INCOME.

NET INCOME BEFORE TAXES

See NET INCOME.

NET LEASE

A commercial lease in which the lessee pays the rent for occupancy plus maintenance and operating expenses, such as taxes, insurance, utilities and repairs. The rent paid is “NET” to the lessor, such as all profit.

NET MARGIN

Net profit before taxes expressed as a percent of net sales. See PROFIT MARGIN.

NET LOSS

Net income that has a negative value. See NET INCOME (or LOSS).

NET OPERATING INCOME

The balance remaining after deduction of cost of goods sold and overhead expenses from gross income but before debt service.

NET PRESENT VALUE (NPV)

In evaluating an investment, such as a capital expenditure, all cash outflows and all cash inflows are calculated using a DISCOUNT RATE to give the worth (the PRESENT VALUE) of making the investment at a given point in time, such as today. Also, the value today of all future income from a project minus the amount of the investment. See PRESENT VALUE; INTERNAL RATE OF RETURN.

NET PROFIT

Net income that has a positive value. Opposite of NET LOSS. See NET INCOME.

NET PROFIT AFTER TAXES

Same as NET INCOME AFTER TAXES when the value is positive. See NET INCOME.

NET PROFIT BEFORE TAXES

Same as NET INCOME BEFORE TAXES when the value is positive. See NET INCOME.

NET PROFIT ON SALES

A measure of efficiency of a company; divide net income before taxes by gross sales and express as a percent. When compared with prior periods, net profit on sales can reveal trends of management efficiency. See NET INCOME.

NET SALES

An accounting term consisting of GROSS SALES less returns, allowances, freight out and cash discounts allowed.

NETWORKING

Regular communication among businesses or individuals to exchange information for the benefit and growth of the entire group; the sharing of information.

NET WORKING CAPITAL

More precise wording for WORKING CAPITAL to differentiate from GROSS WORKING CAPITAL. See WORKING CAPITAL.

NET WORTH

The amount owned by the owners; the amount by which assets exceed liabilities. The book value of the investments plus retained earnings. Also called EQUITY; OWNER’S EQUITY. For a corporation, net worth is known as STOCKHOLDERS’ EQUITY. For a partnership, the value of the total of all the shares of all the partners. For a proprietorship, net worth is known as OWNER’S EQUITY. For an individual, net worth is also called PERSONAL NET WORTH, the total value of all possessions (assets), such as cash, checking account balance, stocks, bonds, house, car and personal property minus all debts such as a mortgage, loans and revolving credit accounts.

NET YIELD

The portion of gross yield that remains after all costs, such as loan servicing and reserves, are deducted.

NEW ISSUE

A stock or bond offered to the public for the first time.

NFIB

See NATIONAL FEDERATION OF INDEPENDENT BUSINESS.

NICHE

An individual specialization in business. The area of the market where a company or product is particularly strong. This specialization often results in super high quality by the specialist company and elimination of competition because of the uniqueness.

NLRB

See National Labor Relations Board.

NOMINAL INTEREST RATE

The rate of interest that is stated in a note or contract and may differ from the true or effective interest rate. See EFFECTIVE INTEREST RATE, INTEREST.

NO MINIMUM BALANCE

A bank account that can have a zero amount of money on deposit and no service charge will be assessed.

NONCOMPETITION CLAUSE

A provision in a contract or lease prohibiting a person or business from operating or controlling a similar business. Often, when a business is sold, the prior owner must agree to a NONCOMPETITION CLAUSE to prevent competition with the new owner.

NON-NOTIFICATION BASIS FACTORING

See FACTORING.

NONPERFORMING ASSETS

Loans in arrears.

NONPRICE COMPETITION

Competition among products, services or companies for sales by means other than the basis of price, such as advertising, superior product quality and perception of benefit to the customer.

NONPROFIT

An association or corporation that is exempted from paying corporate income taxes because it engages in charitable, cultural, educational or socially desirable programs for the public good. Contributions by the public or by businesses are also tax deductible. Also called NOT-FOR-PROFIT.

NONRECOURSE LOAN

A LOAN in which the borrower may have pledged collateral, but the borrower is not held personally liable. The lender of a nonrecourse loan generally feels confident that the property used as collateral will be adequate security for the loan.

NONRECURRING

One time; not repeating. In accounting, often used as a substitute for nonrecurring expenses that are not expected to occur again, such as start-up expenses and large fixed- asset purchases.

NORMAL VALUE

The usual price. See FAIR MARKET VALUE.

NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)

An agreement among the countries of North America to promote more free trade among themselves.

NOTARY

Short for NOTARY PUBLIC.

NOTARY PUBLIC

A state registered public officer who administers oaths; attests and certifies documents by signature and seal, giving authenticity; takes depositions and affidavits. In the absence of a seal, the notarization is void.

NOTE

A business loan, usually short term; a written promise to pay, stating the amount, the interest rate, the time, the method of payment and the obligation to repay. A note is evidence of a DEBT. A note may be secured or unsecured. Also called PROMISSORY NOTE.

NOTE PAYABLE

A NOTE by a person or business that is due and owing; an obligation or lien that must be repaid and is due.

NOTE RECEIVABLE

An amount loaned to another that is owed and payable to the holder of the NOTE.

NOTES TO FINANCIAL STATEMENTS

A section of an ANNUAL REPORT that presents clarifying information concerning the financial statements.

NOT-FOR-PROFIT

See NONPROFIT.

NOTICE OF DEFAULT

A legal document, issued by a lender, that advises a borrower that an amount due has not been repaid as promised.

NOTIFICATION BASIS FACTORING

See FACTORING.

NPV

See NET PRESENT VALUE.

NSF

An abbreviation for NON-SUFFICIENT FUNDS. See INSUFFICIENT FUNDS.

NULL AND VOID

Having no legal force or effect.

 

All definitions were taken from www.small-business-dictionary.org.