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Finance GlossaryAnnual Net Profit Margin
Annual Net Profit Margin
Definition of Annual Net Profit Margin
A Net Profit Margin is the ratio of a company’s net profits to revenues. The formula to calculate Net Profit Margin is:
Net Profit Margin = Net Profit* / Revenue * 100
*Net profit = Revenue - Cost of goods - Operating Cost - Other Expenses - Interest - Taxes
Net Profit Margin is expressed as a percentage, which means that you can compare the financial health of multiple companies.
A company can use its Net Profit Margin to understand whether its strategies and business models are effective.
Net Profit Margin = Net Profit* / Revenue * 100
*Net profit = Revenue - Cost of goods - Operating Cost - Other Expenses - Interest - Taxes
Net Profit Margin is expressed as a percentage, which means that you can compare the financial health of multiple companies.
A company can use its Net Profit Margin to understand whether its strategies and business models are effective.
Related Terms
Broker
A broker is an intermediary between a securities exchange and investors. Only registered entities can place trades on a securities exchange. These members can be individuals or firms known as stockbrokers.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
After Hours Trading
After hours trading means buying and selling securities after the end of regular market hours. In India, the stock market is open for regular trade from 9.15 AM to 3.30 PM.
After hours trading is allowed from 3.40 PM to 4 PM. Around the world, stocks are known to suffer from a lack of liquidity during after hours trading.
After hours trading is allowed from 3.40 PM to 4 PM. Around the world, stocks are known to suffer from a lack of liquidity during after hours trading.
Liquidity Risk
Liquidity Risk is the potential inability of a company to fulfil its debt obligations. It also refers to the lack of liquidity that an equity share of other financial instruments like commodity futures may carry.
At The Close Or Closing Price
At the close or closing price is the last traded price of securities like stocks, ETFs, and others at the end of regular market hours.
For example, if a stock hit Rs. 4,500 at 3.30 PM (market close), then that is its price at the close also known as the closing price.
Unlike Adjusted Closing Price, at the close or closing price does not take into account price changes due to corporate actions.
For example, if a stock hit Rs. 4,500 at 3.30 PM (market close), then that is its price at the close also known as the closing price.
Unlike Adjusted Closing Price, at the close or closing price does not take into account price changes due to corporate actions.
Equity Capital Markets
Equity capital markets (ECMs) are a place where companies raise money by offering equity shares to financial firms, institutional investors, and retail investors.
Fund raising of this kind is often done through private placements or Initial Public Offerings (IPOs) in the primary market, which is a part of the ECM. The biggest IPOs in India are all part of the ECM.
The equity capital market is also a place where shares, futures, options, and other financial instruments are traded. This part of the ECM is known as the secondary market. The stock market is a popular example of an ECM.
Fund raising of this kind is often done through private placements or Initial Public Offerings (IPOs) in the primary market, which is a part of the ECM. The biggest IPOs in India are all part of the ECM.
The equity capital market is also a place where shares, futures, options, and other financial instruments are traded. This part of the ECM is known as the secondary market. The stock market is a popular example of an ECM.
India VIX
India VIX is an index that measures volatility and market sentiment. The term VIX stands for Volatility Index and thus, the full form of India VIX is Indian Volatility Index.
A higher India VIX means higher volatility whereas India VIX would be lower due periods of low volatility. In fact, there are absolute values that help understand volatility via India VIX.
India VIX typically moves between 15 to 30, which represents a range that is considered “normal” as far as volatility is concerned.
However, India VIX has touched 90 during the 2008 financial crisis and trended near the value once again when the pandemic broke out in 2020.
A higher India VIX means higher volatility whereas India VIX would be lower due periods of low volatility. In fact, there are absolute values that help understand volatility via India VIX.
India VIX typically moves between 15 to 30, which represents a range that is considered “normal” as far as volatility is concerned.
However, India VIX has touched 90 during the 2008 financial crisis and trended near the value once again when the pandemic broke out in 2020.
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