Reebok 2010 Annual Report Download - page 242

238 Additional Information Glossary
Green grass retailers
Golf distribution channel. Small golf specialty
shops typically located at a golf course.
Gross Domestic Product (GDP)
Market value of all finished goods and services
produced within a country in a given period of
time.
GDP = consumption + investment + government
spending + (exports − imports).
Gross margin
Gross profit as a percentage of net sales.
Gross margin = (gross profit / net sales) × 100.
Gross profit
Difference between net sales and the cost of
sales.
Gross profit = net sales – cost of sales.
H
Halo effect
The halo effect refers to the cognitive bias
effect that when we consider something
good (or bad) in one category, we are likely to
make a similar evaluation in other (related)
categories.
Hardware
Product category which comprises equipment
that is used rather than worn by the athlete,
such as bags, balls, fitness equipment, golf
clubs and hockey sticks.
Hedging
A strategy used to minimise exposure to
changes in prices, interest rates or exchange
rates by means of derivative financial
instruments (options, swaps, forward
contracts, etc.) see also Natural hedges.
I
Institutional investors
Investors such as investment companies,
mutual funds, brokerages, insurance
companies, pension funds, investment banks
and endowment funds. They are financially
sophisticated, with a greater knowledge of
investment vehicles and risks, and have the
means to make large investments.
Interest coverage
Indicates the ability of a company to cover
net interest expenses with income before net
interest and taxes.
Interest coverage = (income before net interest
expense and tax / net interest expense) × 100.
International Financial Reporting Standards
(IFRS)
Reporting standards (formerly called IAS)
which have been adopted by the International
Accounting Standards Board (IASB). The
objective is to achieve uniformity and
transparency in the accounting principles
that are used by businesses and other
organisations for financial reporting around the
world.
International Labour Organization
The International Labour Organization (ILO)
is a specialised agency of the United Nations
that engages in formulating and implementing
international social and workplace standards
and guidelines see also www.ilo.org.
ISO 14001
International Organization for Standardization
(ISO) Standard 14001 specifies the
requirements for an environmental
management system within companies/
organisations. It applies to those environmental
aspects over which the organisation has
control and over which it can be expected
to have an influence (e.g. energy and water
consumption).
J
Joint venture
A cooperation between companies involving
the foundation of a new, legally independent
business entity in which the founding
companies (two or more companies)
participate with equity and significant
resources.
K
Key accounts
Wholesalers or retailers which are primary
customers for the Group and account for a
large percentage of sales.
Kicks
Informal word for athletic footwear.
Kinesiology
The science of the psychological mechanisms
associated with human movement.
L
Leather Working Group
The Leather Working Group (LWG) was
formed in April 2005 to promote sustainable
and appropriate environmental stewardship
practices within the leather industry see also
www.leatherworkinggroup.com.
Licensed apparel
Apparel products which are produced and
marketed under a licence agreement. The
adidas Group has licence agreements with
sports organisations (e.g. FIFA, UEFA, IOC),
sports leagues (e.g. NFL, NBA), professional
teams (e.g. Real Madrid, AC Milan) and
universities (e.g. UCLA, Notre Dame).
Lien
The right to take and hold or sell the asset of a
debtor as security or payment for a debt.
Liquidity I, II, III
The liquidity ratio indicates how quickly a
company can liquidate its assets to pay for
current liabilities.
Liquidity I:
((Cash + short-term financial assets) / current
liabilities) × 100.
Liquidity II:
((Cash + short-term financial assets + accounts
receivable) / current liabilities) × 100.
Liquidity III:
((Cash + short-term financial assets + accounts
receivable + inventories) / current liabilities) × 100.
M
Market capitalisation
Total market value of all shares outstanding.
Market capitalisation = number of shares out-
standing × current market price.
Marketing working budget (MWB)
Promotion and communication spending
including sponsorship contracts with teams
and individual athletes, as well as advertising,
retail support, events and other communication
activities, but excluding marketing overhead
expenses. As MWB expenses are not
distribution channel-specific, they are not
allocated to the Group’s operating segments.
Mono-branded stores
adidas, Reebok or Rockport branded stores
not operated or owned by the adidas Group
but by franchise partners. This concept is
used especially in the emerging markets such
as China, benefiting from local expertise of
the respective franchise partners see also
Franchising.