This illustrated glossary uses Visual Finance™ to provide a contextualized 'big picture' view of financial results. The examples feature data for the Round Number Company—a 'made-up company' with simplified figures. The Appendix presents an explanation of how to read Visual Finance as well as the financial statements and VF views for the Round Number Company.
NPV is used to determine when, if ever, a capital investment will generate a profit, and how much that will be in today’s terms. Cash Flows of future years are discounted because ‘cash next year’ is worth less than ‘cash this year’ for a variety of reasons (inflation, risk, etc.). See for example, this NPV Calculator.
The above is our generic explanations of common corporate financial terminology. Actual meanings can vary widely from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
term list.