Definitions

Use of non-International Financial Reporting Standards (IFRS) performance measures

 
Non-IFRS performance measure   Description   Reason for use of the measure
Return on capital employed   Profit/loss after financial items with the addition of financial expenses in relation to the average capital employed   This is the central ratio for measuring return on all capital tied up in operations
Balance sheet total/Total assets   The value of all assets   The balance sheet total is used in the key indicator Return on total assets
Yield   Proposed dividend as a percentage of the share price at the end of the financial year   Shows the return on the share at the share price on the balance sheet date, from a shareholder perspective 
EBITDA   Operating income before depreciation/amortisation and impairment of tangible and intangible assets   This key indicator is used to analyse value creation
EBITDA-margin   EBITDA in relation to net sales   This key indicator is used to analyse value creation
Acid test ratio   Current assets excluding inventory in relation to current liabilities   A measure that shows the company’s ability to repay its debt
Earnings per share   Cash flow from operating activities, divided by the current number of shares   Shows shareholders the cash flow per share
Net profit margin   Profit for the year as a percentage of net sales for the year   Shows the remaining share of net sales after all of the company’s costs, excluding tax, have been deducted
Net debt/equity ratio   Interest-bearing liabilities and provisions less cash and cash equivalents and current investments, in relation to equity   Shows financial risk; a financial target defined by the Board of Directors
P/E ratio   Share price at the end of the financial year, divided by earnings per share after tax   A traditional measure for showing the relation between share price and earnings per share
Earnings per share after tax and full dilution   Profit/loss for the year after tax, divided by the average number of shares plus the number of shares that would be issued as an effect of employee stock option programmes in progress   The measure is defined in IFRS, but a somewhat divergent definition means that this key indicator is reported as a non-IFRS key indicator
Interest-bearing net debt   Interest-bearing liabilities and provisions less cash and cash equivalents and current investments   Shows total interest-bearing liability, which is important to follow over time
Operating margin   Operating income expressed as a ­percentage of net sales   The operating margin is a key indicator for ­monitoring value creation
Equity/assets ratio   Equity expressed as a percentage of the balance sheet total   A traditional measure for showing financial risk, expressed as the amount of restricted equity financed by the shareholders
Capital employed   Equity plus interest-bearing liabilities and provisions   Capital employed is used in the key indicator
Return on capital employed
Dividend’s share of equity   Total amount distributed, divided by equity   A measurement showing how much equity was distributed
Dividend’s share of profit   Total amount distributed, divided by profit/loss for the year after tax   A measurement showing how much profit/loss for the year was distributed

 

International Financial Reporting Standards (IFRS) performance measures used

 
Cash flow from operating activities   Cash flow from operating activities   IFRS, IAS 7
Earnings per share after tax   Profit/loss for the year after tax, divided by the average number of shares   IFRS, IAS 33