Volvo 2010 Annual Report Download - page 152

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Definitions
Basic earnings per share
Income for the period attributable to shareholders of the Parent Com-
pany divided by the weighted average number of shares outstanding
during the period.
Capital expenditures
Capital expenditures include investments in property, plant and equip-
ment, intangible assets and assets under operating leases. Invest-
ments 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.
Cash-flow
Combined changes in the Group’s liquid funds during the fiscal year.
Changes in liquid funds are specified with reference to changes in
operations, operating activities, changes depending on investments in
equipment, fixed assets etc. and financing 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 amortization
of tangible and intangible assets. This key figure is calculated by add-
ing back depreciation and amortization on the operating income of the
Industrial operations.
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 financial position
Cash and cash equivalents, marketable securities and interest-bear-
ing short- and long-term receivables reduced by short- and long-term
interest-bearing liabilities and provisions for post-employment bene-
fits.
Operating margin
Operating income divided by net sales.
Return on shareholders’ equity
Income for the period divided by average shareholders’ equity.
Self-financing ratio
Cash-flow from operating activities (see Cash-flow statement) divided
by net investments in fixed assets and leasing assets as defined in the
cash-flow statement.