Glossary

The right to purchase a specific underlying security within a specified period of time at an agreed price.

Measure of a company´s financial and earnings potential. It is calculated as the difference between the inflow and outflow of cash and cash equivalents generated from ongoing business activities during the financial year.

Institutionalised arrangements for ensuring that a company´s management and staff duly comply with all statutory provisions and prohibitions.

A financial indicator. It represents the ratio of adjusted cash flow from operating activities to net indebtedness and pensions. The rating agencies´ comparable criteria for an investment grade rating are met if a target of at least 60 per cent is achieved sustainably.

A balance sheet item used to show taxable and deductible temporary differences. Deferred taxes reflect the temporary differences between assets and liabilities recognised for financial reporting purposes and such amounts recognised for income tax purposes.

Transactions by members of a company´s supervisory, executive or divisional boards, or their family members, involving shares in "their" company. Under German law, any such dealings must be disclosed if they exceed EUR 5,000 within a calendar year.

Indicator for assessing the profitability of an investment in shares. It is determined by dividing the dividend by the share price at the close of the reporting year and then multiplying it by 100.

Financial indicator denoting earnings before interest and taxes.

Financial indicator denoting earnings before interest, taxes, depreciation and amortisation. Depreciation relates to items of property, plant and equipment and amortisation to intangible assets – both terms apply equally to non-current and current assets. The figure also includes impairment losses on equity investments accounted for under the equity method and on assets held for sale.

Accounting method for measuring income derived from a company´s investments in associated companies and joint ventures. Under this method, investment income equals a share of net income proportional to the size of the equity investment.

Financial indicator expressing the ratio of shareholders´ equity to total assets.

Financial indicator expressing the cash flow from operating activities remaining in the reporting period after deducting net cash used for investing activities.

Financial indicator expressing the ratio of net indebtedness plus pension provisions to equity.

Group of subsidiaries included in a company´s consolidated financial statements.

Losses recognised on the carrying amount of assets. Impairment charges are recognised when an asset´s "recoverable value" (the higher of fair value less costs to sell and value in use) is below its carrying amount. By contrast, depreciation or amortisation is the systematic allocation of the depreciable amount of an asset over its useful life.

Financial indicator expressing the degree to which capital expenditure was financed from the cash flow generated.

Financial indicator denoting non-current borrowing less cash, cash equivalents and current securities.

An earnings measure. The operating result is calculated as the profit from operating activities, adjusted for book gains and losses, write-backs of provisions, impairment losses, results of financial investments and the measurement of financial liabilities at the end of the period.

A contract giving the option buyer the right to sell a specified amount of the underlying security within a specified period of time at an agreed price (strike price).

A standardised measure used on international financial markets to judge and categorise a company´s creditworthiness. A rating can enable conclusions to be drawn about whether an issuer is capable of meeting in full its obligations under the terms of the issue.

Registered shares that may only be transferred with the approval of the company.

Transfer of a company´s profit to equity. It strengthens the company´s financial position.

Financial indicator expressing the ratio of net profit to shareholders´ equity.

Financial indicator expressing the net profit before taxes in relation to sales revenue.

Financial indicator expressing the overall return that an investor earns from the increase in the market capitalisation or share price, plus the dividend payment. The total shareholder return is calculated from the share price at the close of the reporting year plus the dividend paid in respect of the previous year, multiplied by 100 and divided by the share price at the close of the previous year.

Financial indicator for assessing a company´s liquidity, measured as the difference between its current assets and its current liabilities.