Recording revenues & expenses in the period in which they are earned or incurred regardless of whether cash is received or disbursed in that period.
Capital employed
Shareholders’ funds plus minority interest and debt.
Capital structure leverage
Average total assets divided by average shareholders equity.
Cash earnings per share
Profit after tax adjusted for non cash items minus share of associate company profits plus dividends from associate companies divided by the weighted average number of ordinary shares in issue during the period.
Cash to price earnings
Diluted market price per share divided by diluted cash earnings per share.
Cash interest cover
Cash flow from operations before working capital changes divided by cash interest payment.
Cash interest and tax cover
Cash flow from operations before working capital changes divided by cash interest and tax payments.
Cash ratio
Cash plus short term investments divided by current liabilities.
Capital employed turnover
Capital structure leverage into common earnings leverage.
Common earnings leverage
Profit attributable to equity holders of the parent divided by profit after tax.
Contingent liabilities
A condition or situation existing at the balance sheet date due to past events, where the financial effect is not recognised because:
1. the obligation is crystalised by the occurrence or non occurrence of one or more future events or,
2. a probable outflow of economic resources is not expected or,
3. it is unable to be measured with sufficient reliability.
Current ratio
Current assets divided by current liabilities.
Debt/equity ratio
Debt as a percentage of shareholders’ funds and minority interest.
Diluted EPS
Profit attributable to equity holders of the parent divided by the weighted average number of ordinary shares in issue during the period adjusted for options granted but not exercised.
Dividend payout ratio
Total dividend as a percentage of company profits adjusted for non cash gains/losses.
Dividend yield
Dividend per share as a percentage of the share price at the end of the period.
Earnings per share
Profit attributable to equity holders of the parent divided by the weighted average number of ordinary shares in issue during the period.
EBIT
Earnings before interest and tax (includes other operating income).
EBIT margin
EBIT divided by turnover inclusive of share of associate company turnover.
EBITDA
Earnings before interest, tax, depreciation and amortisation.
Effective rate of taxation
Tax expense divided by profit before tax.
EV (enterprise value)
Market capitalisation plus net debt.
Financial leverage multiplier
Total assets divided by the shareholders’ funds plus minority interest.
Interest cover
Consolidated profit before interest and tax over finance expenses.
Long term debt to total debt
Long term loans as a percentage of total debt.
Market capitalisation
Number of shares in issue at the end of period multiplied by the market price at end of period.
Market value added
Market capitalisation minus shareholder’s funds.
Net assets
Total assets minus current liabilities minus long term liabilities minus minority interest.
Net assets per share
Net assets over weighted average number of ordinary shares in issue during the period adjusted for options granted but not exercised.
Net debt
Total debt minus (cash plus short term deposits).
Net profit margin
Profit after tax divided by turnover inclusive of share of associate company turnover.
Net working capital
Current assets minus current liabilities.
Pretax return on capital employed
Consolidated profit before interest and tax as a percentage of average capital employed.
Price earnings ratio
Market price per share (diluted) over diluted earnings per share.
Price to book ratio
Market price per share (diluted) over net asset value per share.
Property, plant and equipment turnover
Turnover excluding share of associate company turnover divided by average property, plant and equipment balances.
Quick ratio
Cash plus short term investments plus receivables, divided by current liabilities.
Return on assets
Profit after tax divided by the average total assets.
Return on equity
Profit attributable to shareholders as a percentage of average shareholders’ funds.
Sales to assets ratio/total asset turnover
Turnover including share of associate company turnover divided by average total assets.
Share turn ratio
Total volume of shares traded during the year divided by average number of shares in issue.
Shareholders’ funds
Total of issued and fully paid share capital, capital reserves and revenue reserves.
Total debt
Long term loans plus short term loans and overdrafts.
Total equity
Shareholders’ funds plus minority interest.
Total shareholder return
(P1 P0 +D) / P0 x 100
P1 = Market price at the end of the financial year
P0 = Diluted market price at the end of the previous financial year
D = Adjusted dividend for the year
Total value added
The difference between net revenue (including other income) and expenses, cost of materials & services purchased from external sources.
