Unilever 2000 Annual Report Download - page 95

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93
Unilever Annual Report & Accounts and Form 20-F 2000 Financial StatementsUnilever Annual Report & Accounts and Form 20-F 2000
Five year record
Unilever Group
Definitions
Return on shareholders’ equity is net profit attributable to ordinary shareholders expressed as a percentage of the average capital and
reserves attributable to ordinary shareholders during the year.
Return on capital employed is the sum of profit on ordinary activities after taxation plus interest after taxation on borrowings due after
more than one year, expressed as a percentage of the average capital employed during the year.
Return on shareholders’ equity is substantially influenced by the Group’s policy prior to 1998, of writing off purchased goodw ill in the year
of acquisition as a movement in profit retained. Return on capital employed and net gearing are also influenced but to a lesser extent.
Group operating margin is group operating profit expressed as a percentage of group turnover.
Net profit margin is net profit expressed as a percentage of group turnover.
Net interest cover is profit on ordinary activities before net interest and taxation divided by net interest.
Net interest cover based on EBITDA (before exceptional items) is earnings on ordinary activities before net interest, taxation, depreciation
and amortisation and exceptional items divided by net interest.
Net gearing is net debt (borrowings less cash and current investments) expressed as a percentage of the sum of capital and reserves,
minority interests and net debt. In calculating capital and reserves, the book value of shares or certificates held in connection with share
option plans is classified as fixed assets, rather than deducted from reserves as required by Dutch law.
Ratio of earnings to fixed charges Earnings consist of net profit (including the profit on the sale of the speciality chemicals businesses)
increased by fixed charges and income taxes. Fixed charges consist of interest payable on debt and a portion of lease costs determined
to be representative of interest. This ratio takes no account of interest receivable although Unilever’s treasury operations involve both
borrow ing and depositing funds.
Funds from operations after interest and tax (before exceptional items) over lease adjusted net debt is profit on ordinary activities before
depreciation and amortisation and exceptional items, and after actual tax paid and other non exceptional non cash items, expressed as a
percentage of the lease adjusted net debt. Lease adjusted net debt is calculated by adding to the net debt five times the operational lease
costs.
Weighted average cost of capital is calculated as the real cost of equity multiplied by the market capitalisation, plus the real after taxation
interest cost of debt multiplied by the market value of the net debt, divided by the sum of the market values of debt and equity.