ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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NET CONTRIBUTION Definition
NET CONTRIBUTION is the amount remaining after all relevant deductions have been made to the gross amount, e.g., Net Contribution to Margin.
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RELEVANT RANGE is the range of activity over which changes in cost are of interest to management
MARGIN is a. in accounting see GROSS MARGIN; or, b. in securities, it is the process whereby investors are allowed to buy securities on credit. By buying on margin, the investor significantly increases the leverage, or risk/return potential, of the investment. For example, a purchase of $100 worth of stock with cash of $50 means a four to one increase in value if the stock doubles (versus a two to one increase if the purchase is all cash). On the other hand, if the stock declines, the investor would be forced either to put up more cash or sell the stock at a loss to meet margin requirements established by the Federal Reserve Bank. The margin rules currently stipulate that an investor must maintain 50% of the total market value of the securities in the account in cash.
