Standard advisory glossary

accounting · intro

Net Margin

Also called: net profit margin

The percentage of revenue that remains as net income after all expenses, including cost of goods sold, operating expenses, interest, and taxes, have been deducted, representing a company's overall bottom-line profitability.

finance · intro

Net Present Value

Also called: NPV

The sum of the discounted values of all expected future cash flows from an investment, minus the initial cost of making it, used to determine whether an investment is expected to create or destroy value. A positive net present value indicates the investment is expected to earn more than its cost of capital; a negative one indicates the opposite.

strategy · intro

Network Effect

A phenomenon in which a product or service becomes more valuable to each user as more people use it, common in communication platforms, marketplaces, and social networks. Strong network effects can create a significant competitive moat, since a new entrant must attract a large user base before it can offer comparable value to an established competitor's network.

ma · intro

Non-Disclosure Agreement

Also called: NDA

A legal contract requiring parties to keep specified information confidential, commonly signed early in deal discussions before sensitive financial or operational information is shared with a prospective buyer during due diligence.