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Definition of Net Interest Margin (NIM)

Definition: What is the Net Interest Margin (NIM)?

Net Interest Margin (NIM) is the profitability ratio that measures how well a company is making the decisions by comparing the income, debt, and expenses of these investments.

In other words, the NIM ratio is used to shows that, from the operations of the company how much money a company make. This is the same as the gross margin of the company.

Definition of Net Interest Margin (NIM)

For analyzing the funds’ manager decision making this measurement is used. If the result of this calculation is in the positive percentage it means that funds manager made good decisions and able to get profit on his investment.

If the result is in the negative percentage it means that the interest expenses exceed the investment earning because of which the fund manager lost money on his investment.

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