Adidas 2003 Annual Report Download - page 162

LIQUIDITY RATIOS I– III /// The liquidity ratio measures the extent to which a company can quickly
liquidate assets to cover short-term liabilities. They are calculated as
follows:
Liquidity I: The sum of cash and short-term financial assets divided by
current liabilities. Multiplied by 100.
Liquidity II: The sum of cash and short-term financial assets as well as
accounts receivable divided by current liabilities. Multiplied by 100.
Liquidity III: The sum of cash and short-term financial assets as well
as accounts receivable and inventories divided by current liabilities.
Multiplied by 100.
LOCAL PRODUCTION /// Products manufactured locally by adidas-Salomon subsidiaries for
their domestic market.
LPGA /// Ladies Professional Golf Association
MARKET The total market value of all outstanding shares. It is calculated by
CAPITALIZATION /// multiplying the number of shares by the current market price.
MARKETING WORKING Promotion and communication spending including sponsorship con-
BUDGET /// tracts with teams and individual athletes, as well as advertising, retail
support, events and other communication activities, but excluding
marketing overhead expenses.
METALWOOD /// Golf clubs (drivers and fairway woods) which are constructed from
steel and/or titanium alloys.The name also pays homage to persim-
mon wood, which was originally used in the creation of these products.
This is the largest golf product category in terms of sales.
MI adidas /// adidas customization project that gives consumers the opportunity to
create their own unique footwear to their personal specifications in
terms of function, fit and aesthetics. In 2003, this system was available
in Europe, Japan and USA for the running, football, tennis, basketball
(USA only) and handball (Europe only) categories.
MINORITY INTERESTS /// The part of net income which is not attributable to a company. Outside
ownership interests in subsidiaries that are consolidated with the
parent company for financial reporting purposes.
NATURAL HEDGES /// An offset of currency risks that occurs naturally as a result of a com-
pany’s normal operations, without the use of derivatives. For example,
revenue received in a foreign currency and used to pay known commit-
ments in the same foreign currency.
NBA /// National Basketball Association
OPERATING EXPENSES /// Costs associated with running a business which are not directly attrib-
utable to the products or services sold. This refers to sales and mar-
keting, research and development, as well as general and administra-
tive costs, and depreciation of non-production assets.
OPERATING WORKING A measurement of the net operating assets that a company must
CAPITAL /// procure in order to finance its day-to-day business. It is the sum of
receivables and inventories less accounts payable.
OPTION /// A financial instrument which ensures the right to purchase (call option)
or the obligation to sell (put option) a particular asset (for example
shares or foreign exchange) at a pre-determined price (strike price) on
or before a specific date.
OWN-RETAIL Sales directly generated through a store operated by adidas. adidas
ACTIVITIES /// own retail includes concept stores, concession corners, e-commerce
and factory outlets.
PGA /// Professional Golf Association
158 FINANCIAL ANALYSIS SUPPLEMENTARY INFORMATION /// GLOSSARY