Reebok 2012 Annual Report Download - page 273

adidas Group
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2012 Annual Report
Additional Information
251
2012
Glossary
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05.2
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CRM (Customer Relationship
Management)
Capabilities and methodologies used by a company
with its customers to systematically design and
build customer relationships and processes.
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D
Days of Sales Outstanding (DSO)
Average time of receipt of outstanding payments
from customers.
Diluted Earnings Per Share
(Diluted EPS)
Performance indicator used to gauge a company’s
earnings per share, assuming that all stock options
and conversion rights related to a convertible bond
are exercised, which would result in an increase of
the number of shares outstanding.
Diluted EPS = (net income attributable to share-
holders + interest expense on convertible bonds
net of tax) / (weighted average number of shares
outstanding during the year + weighted share
options + shares from assumed conversion of
convertible bonds).
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E
EBITDA
Earnings before interest, taxes, depreciation,
amortisation and impairment losses as well as
reversals of impairment losses for tangible and
intangible assets.
Economic value added (EVA)
Economic value added is a measure of a company’s
financial performance based on the residual
wealth calculated by deducting cost of capital
from its operating profit (after tax). EVA can thus
also be described as the surplus profit over the
WACC demanded by the capital market, indicating
whether shareholders have earned a return that
compensates the risk.
EVA = operating profit after tax – cost of capital.
Emerging markets
Developing countries showing potential for growth
in both economic strength and private wealth in the
future. For the adidas Group, emerging markets are
the developing countries of Asia, Eastern Europe,
Latin America and Africa.
Enterprise Resource Planning (ERP)
A business management system that integrates
all facets of the business (e.g. planning,
manufacturing, sales and marketing).
Equity derivatives
Class of derivatives whose value is at least partly
derived from one or more underlying equity
securities. Options and forward contracts are by
far the most common equity derivatives. However,
there are many other types of equity derivatives
that are actively traded.
Equity ratio
Shows the role of shareholders’ equity within the
overall financing structure of a company.
Equity ratio = (shareholders’ equity / total assets)
× 100.
E-tailer
Retailer that primarily uses the internet as a
medium for consumers to shop for the goods or
services provided. E-tailers optimise the internet
potential to attract, convert and retain consumers.
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F
Fair Factories Clearinghouse (FFC)
The Fair Factories Clearinghouse was established
in 2004 with the purpose of improving social,
environmental and security standards and helping
to create humane working conditions for workers
making consumer goods globally. Membership
includes many sporting and consumer goods
companies as well as a wide range of consumer
goods suppliers :
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WWW.FAIRFACTORIES.ORG.
Fair Labor Association (FLA)
The Fair Labor Association, a non-profit labour
rights organisation, is a multi-stakeholder
initiative bringing together companies, colleges
and universities and civil society organisations
to improve working conditions worldwide by
promoting adherence to international and national
labour laws :
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WWW.FAIRLABOR.ORG.
Fair value
Amount at which assets are generally traded
between business parties. Fair value is often
identical to market price.
Finance lease
Method of acquiring an asset that involves a lease
with a special leasing company for a specific, non-
terminable initial leasing term. The investment risk
is borne by the lessee.
Financial leverage
Ratio reflecting the role of borrowings within the
financing structure of a company.
Financial leverage = (net borrowings /
shareholders’ equity) × 100.
Forward contract
Agreement to exchange amounts of one currency
for another currency at an agreed fixed rate at a
future date.
Franchising
Form of business by which the owner (franchisor)
of a product, service or method obtains distribution
through affiliated dealers (franchisees). The
franchisor offers assistance in organising, training,
merchandising, marketing and managing in return
for a monetary consideration.
Free cash flow
Cash that is generated by a company’s operating
activities after the deduction of net Investments
and other cash expenses such as taxes and interest
from the operating profit.
Free cash flow = operating profit +/– change in
operating working capital +/– net investments
(capital expenditure less depreciation and
amortisation) +/– financial result and income taxes.