Volvo 2009 Annual Report Download - page 144

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Defi nitions of key ratios
Basic earnings per share
Income for the period attributable to shareholders of the parent
company divided by the weighted average number of shares out-
standing during the period.
Capital expenditures
Capital expenditures include investments in property, plant and
equipment, intangible assets and assets under operating leases.
Investments in fi xed assets included in the Group’s cash-fl ow
statement include only capital expenditures that have reduced
the Group’s liquid funds during the year.
Cash-fl ow
Combined changes in the Group’s liquid funds during the fi scal
year. Changes in liquid funds are specifi ed with reference to
changes in operations, operating activities, changes depending
on investments in equipment, fi xed assets etc. and fi nancing
activities such as changes in loans and investments.
Diluted earnings per share
Diluted earnings per share is calculated as income for the period
attributable to the Parent Company’s shareholders divided by the
average number of shares outstanding plus the average number
of shares that would be issued as an effect of ongoing share-
based incentive programs and employee stock option programs.
EBITDA
EBITDA is the operating income before depreciation and amorti-
zation. This key fi gure is calculated by adding back depreciation
and amort ization on the operating income of the Industrial opera-
tions.
Equity ratio
Shareholders’ equity divided by total assets.
Interest coverage
Operating income plus interest income and similar credits divided
by interest expense and similar charges.
Joint ventures
Companies over which the Company has joint control together
with one or more external parties.
Net fi nancial position
Cash and cash equivalents, marketable securities and interest-
bearing short- and long-term receivables reduced by short- and
long-term interest-bearing liabilities and provisions for post-
employment benefi ts.
Operating margin
Operating income divided by net sales.
Return on shareholders’ equity
Income for the period divided by average shareholders’ equity.
Self-fi nancing ratio
Cash-fl ow from operating activities (see Cash-fl ow statement)
divided by net investments in fi xed assets and leasing assets as
defi ned in the cash-fl ow statement.