Volvo 2002 Annual Report Download - page 92

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Definitions
General Meeting
Definitions of key ratios
Capital expenditures
Capital expenditures include investments in property, plant and
equipment, as well as in intangible assets. Investments pertaining to
assets under operating leases are not included.
Investments in fixed assets included in the Group’s cash flow
statement include only capital expenditures that have reduced the
Group’s liquid funds during the year.
Equity ratio
Shareholders’ equity divided by total assets.
Income per share
Net income divided by the weighted average number of shares out-
standing during the period.
Interest coverage
Income divided by interest expense and similar charges. Income
includes operating income and interest income and similar credits.
Net financial position
Cash and bank accounts, marketable securities and interest-bearing
short- and long-term receivables reduced by short- and long-term
interest-bearing loans and provisions for post-employment benefits.
Net debt in Financial Services is not included since the interest
expense on these liabilities is charged against operating income and
does not affect consolidated interest net.
Operating cash flow, excluding Financial Services
Cash flow from operating activities with deductions for net invest-
ments in fixed assets and leasing assets.
Operating margin
Operating income divided by net sales.
Return on operating capital
Operating income divided by average operating capital. Operating
capital consists of operating assets (tangible and intangible assets,
receivables and inventories) reduced by non interest-bearing liabil-
ities and other provisions. This ratio is used only for Volvo's business
areas, not for the Group as a whole.
Return on shareholders’ equity
Net income divided by average shareholders’ equity.
Self-financing ratio
Cash flow from operating activities (see Cash flow statement) divid-
ed by net investments in fixed assets and leasing assets.
Definitions