Reebok 2013 Annual Report Download - page 255

adidas Group
/
2013 Annual Report
Additional Information
251
2013
Glossary
/
05.2
/
Customer Relationship Management
(CRM)
Capabilities and methodologies used by a company
with its customers to systematically design and
build customer relationships and processes.
/
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
shareholders + 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)
DryDye
A fabric dyeing technology that uses pressurised
carbon dioxide to inject dye into fabric instead
of water, which is the traditional medium for
fabric dyeing. This process saves roughly 25
litres of water for a T-shirt and reduces energy
and chemical use by approximately 50%. The
technology was developed in cooperation between
adidas and the Thailand-based Yeh Group.
/
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)
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’s
potential to attract, convert and retain consumers.
/
F
Fair Factories Clearinghouse (FFC)
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
: WWW.FAIRFACTORIES.ORG.
Fair Labor Association (FLA)
A non-profit labour rights organisation and 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 : 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.
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