Asus 2014 Annual Report Download - page 107

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(3) Cash reinvestment ratio = (Net cash flow from operating activity – Cash dividend) / (Gross property,
plant and equipment + Long-term investment + Other non-current assets + Working capital) (Note 5)
6. Leverage:
(1) Degree of operating leverage = (Net operating revenue – Variable operating cost and expense) /
Operating income (Note 6)
(2) Degree of financial leverage = Operating income / (Operating income – interest expense)
Note 4: The following factors are to be included for consideration for the calculation of earnings per share:
1. It is based on the weighted average common stock shares instead of the outstanding stock shares at
yearend.
2. For capitalization with cash or Treasury stock trade, the stock circulation must be included for
consideration to calculate weighted average stock shares.
3. For capitalization with retained earnings and capital surplus, the earnings per share calculated
semi-annually and annually must be adjusted retroactively and proportionally to the capitalization but
without considering the issuance period of the capitalization.
4. If preferred stock shares are nonconvertible and cumulative, the dividend of the year (whether it is
distributed or not) should be deducted from net income or added to the net loss. If preferred stock shares
are not cumulative, preferred stock dividend should be deducted from net income if there is any but it
needs not be added to net loss if there is any.
Note 5: The following factors are to be included for consideration for the analysis of cash flow:
1. Net cash flow from operating activity meant for the net cash inflow from operating activity on the
Statement of Cash Flow.
2. Capital expenditure meant for the cash outflow of capital investment annually.
3. Increase of inventory is counted only when ending inventory exceeds beginning inventory. If the ending
inventory is decreased, it is booked as zero value.
4. Cash dividend includes the amount for common stock and preferred stock.
5. Gross Property, plant and equipment meant for the total Property, plant and equipment before deducting
the accumulated depreciation.
Note 6: Issuers are to have operating cost and operating expenses classified into the category of fixed and variable.
If the classification of operating cost and operating expense involves estimation or discretional judgment, it
must be made reasonably and consistently.
Note 7: For company shares without face value or each face value not equivalent to NTD10, the aforementioned
calculation of paid-in capital ratio is calculated on the equity ratio under the parent company proprietors on
the balance sheet.