- After-Tax Income
- The amount of money that an individual or company has left over after all federal, state and withholding taxes have been deducted from taxable income. After-tax income represents the amount of disposable income that a consumer or firm has to spend on future investments or on present consumption.
Also known as "income after taxes".
When analyzing or forecasting personal or corporate cash flows, it is important to use an estimated after-tax net cash flow. This is a more appropriate measure because after-tax cash flows are what the entity has available for consumption.
This is not to say that all investments are purchased with after tax income; some companies offer salary deferral retirement plans that deduct money on a pretax basis. The money will be taxed once the employee decides to withdraw the amount (such as for retirement). However, because most people have less income during their retirement years compared to their prime earning years, the amount of tax paid will be less.
Investment dictionary. Academic. 2012.
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after-tax — ˈafter tax adjective [only before a noun] TAX relating to the amount that remains after tax has been paid: • after tax income • The bank has just announced after tax profits of $22 billion. after tax adverb : • The company earned a profit aft … Financial and business terms
after tax — ˈafter tax adjective [only before a noun] TAX relating to the amount that remains after tax has been paid: • after tax income • The bank has just announced after tax profits of $22 billion. after tax adverb … Financial and business terms
After-Tax Return On Assets — A profitability measure that indicates how well a company uses its capital resources to generate income. To calculate after tax return on assets, divide the company s total after tax income by the value of its total assets. The resulting figure,… … Investment dictionary
after-tax — ¦ ̷ ̷ ̷ ̷ ¦ ̷ ̷ adjective Etymology: after (II) + tax : remaining after payment of taxes and especially of income tax after tax income … Useful english dictionary
after-tax — [af′tərtaks΄] adj. occurring or remaining after the calculation or payment of taxes [after tax earnings] * * * af·ter tax also af·ter·tax (ăfʹtər tăks) adj. Relating to or being that which remains after payment, especially of income taxes: after… … Universalium
After-Tax Return — The return on an investment including all income received and capital gains, calculated by taking expected or paid income taxes into account. Generally reserved for returns on positions that have been closed out or sold, after tax returns are… … Investment dictionary
After-Tax Contribution — A contribution made to any designated retirement or any other account after taxes has been deducted from an individual s or companies taxable income. After tax contributions can be made on a tax deferral, and on a non tax deferral basis, pending… … Investment dictionary
After Tax Operating Income - ATOI — A company s total operating income after taxes. This non GAAP measure excludes any after tax benefits or charges such as effects from accounting changes. Due to its non GAAP nature, what is included and excluded in the measure differs, therefore … Investment dictionary
After-Tax Return On Sales — A profitability measure that indicates how well a company uses its sales revenue. To calculate after tax return on sales, divide the company s after tax net income by its total sales revenue. The resulting figure, multiplied by 100, will be a… … Investment dictionary
After-Tax Profit Margin — A financial performance ratio, calculated by dividing net income after taxes by net sales. A company s after tax profit margin is important because it tells investors the percentage of money a company actually earns per dollar of sales. This… … Investment dictionary