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Investor Glossary
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y| Z
Please note that the exact definition of some of the financial terms included in this glossary will differ between companies. The definitions included in this glossary are employed consistently by Invensys plc in its presentation of financial results and in its communications.
A
See American Depositary Receipt (below)
AGM
Annual General Meeting. The meeting for shareholders at which routine matters, such as the election of directors and the approval of reports and accounts, are put to the vote of shareholders.
American Depositary Receipt (ADR)
Certificate issued by US banks to facilitate trading for US shareholders in the shares of non-US companies.
Amortisation
An annual charge made to reduce the value of an intangible asset to zero over a period of years.
B
The price at which securities in the market may be bought.
Brokers' Forecasts
Estimates of future company performance issued by financial analysts.
CThe value of the assets employed in a business, including equity and preference share capital, fixed and current assets, and gross borrowings plus current assets and less current liabilities.
Capital Gain
Profit made on the sale of shares, commodities, property or land. In the UK, capital gains tax may be payable on the profit.
Cash Conversion
The proportion of OPBIT that it converted to operating cash flow.
Cash Flow
Cash generated from operations that can be used by the Company to finance investment without raising capital. Sometime also referred to as operating cash flow. See also Free Cash Flow.
CER
Constant Exchange Rates.
Closed period
The period prior to the Company's release of its Half-Yearly or Preliminary results, during which the directors are not permitted to trade in the shares of the Company. Normally a period of two months.
Consensus Forecasts
An average of financial analysts' forecasts of the future financial performance of a company.
Continuing Operations
Operations not classified as discontinued and including acquisitions made during the year
Cum Dividend
Purchase of a share cum dividend means that the buyer of a share is entitled to the next dividend payment. Opposite of ex:
D
The reduction in the balance sheet value of a company asset to reflect its loss of value through age and wear and tear.
Discontinued operations
Operations that have been or will be discontinued by the Company. These items are reported separately on the income statement.
Dividends
The proportion of a company's profit that it pays to its shareholders, usually declared as a dividend per share (DPS). In the UK the dividend is normally paid in two parts; an interim dividend payment and a final dividend once the final results are known.
E
Net income divided by the number of ordinary shares outstanding. Diluted earnings per share adjusts the number of shares to reflect the potential number of shares outstanding after the exercise of options or convertible debt. See Basic and Underlying EPS below.
EGM
Extraordinary General Meeting. A meeting of shareholders which may be called to approve special events such as a take-over, or major acquisition.
Emerging Markets
For the purposes of Invensys' classification, emerging markets includes Bulgaria, Czech Republic, Hungary, Poland, Slovakia, Russia, Mexico, South America, Bangladesh, China, India, Pakistan, Papua New Guinea, ASEAN, Africa and the Middle East
Employee Stock Ownership Plan (ESOP)
A trust established by a company for the allocation of shares to employees. Usually a tax efficient way to provide this motivational benefit.
EPS (Basic)
Basic EPS is calculated based on earnings for continuing operations after minority interests. See above for EPS.
EPS (Underlying)
Underlying EPS is calculated by reference to earnings before exceptional finance costs and foreign exchange losses / gains. See above for EPS.
Equity
The voting capital in the company, represented by the ordinary shares.
Exceptional Costs / Items
Exceptional items are material items of income and expense that should be seperately disclosed to assist in the understanding of the Group's financial performance and in making projections of future results.
Ex Dividend
Purchase of a share ex dividend (xd) means that the buyer of a share is not entitled to the next dividend payment. Opposite of cum.
F
Operating cash flow minus capital expenditure (capex).
FTSE100 Index
The FTSE UK Index Series is designed to represent the performance of UK companies. The FTSE 100 index is an arithmetic index weighted by market capitalisation that illustrates the performance of the shares of the top 100 companies that are listed on the London Stock Exchange.
FTSE4Good Index
The FTSE4Good Index Series has been designed to measure the performance of companies that meet globally recognised corporate responsibility standards, and to facilitate investment in those companies.
G
See AGM and EGM.
Goodwill
On a business combination, the net fair value of the identifiable assets and liabilities is assessed and adjustments are made to bring the accounting policies of businesses acquired in line with those of the Group. The excess of the price paid over the Group's interest in the fair value of identifiable net assets is included in intangible assets as goodwill.
H
Formerly known as interims, the half-yearly report provides an overview of events and performance for the first half of the financial year.
I
Large financial institutions such as pension funds, unit or investment trusts and insurance companies.
Interim Management Statement
Relating to the first and third quarters, the IMS provides an overview of the events and performance of the Group since the last annual or half-yearly financial report.
J
Co-operation on a project or business between two or more corporate bodies.
Long Term Incentive Plan, a type of executive compensation that typically comes in the form of performance-related awards of shares in the Company.
M
Value at current market prices of a company's equity capital. It is calculated by multiplying the current share price by the number of shares outstanding.
Market Price
The price at which a share can currently be traded in the market.
Mid Price
The mid point between the bid and offer price quote in the market.
Minority Interests
The rights of outside shareholders of subsidiary companies of the Group to a proportion of the Group's profits or assets
N
Income (profit) shown after all operating and non-operating income and expense, reserves, income taxes, minority interest and extraordinary items but before preferred and ordinary dividends.
O
The price at which securities may be sold in the market.
Operating Margin
Operating margin is OPBIT as a percentage of revenue.
Operating Profit
The difference between revenue (or turnover) and the costs incurred during operations (total operating expenses).
OPBIT
Operating Profit Before Interest & Tax (and pre amortisation).
Option
The right (but not the obligation) to buy or sell securities at a given price (the "exercise" or "strike" price) before a given date (the "expiry" date).
Ordinary Share
The most common class of share representing the owner's interest in a company.
P
Ratio or multiple calculated by dividing the price per share (P) by the earnings per share (E). A simple measure for comparing the relative valuations of different companies.
PPP
Public Private Partnership. A generic term for projects involving both the private and public sectors.
Preference shares
Shares with a fixed dividend. The holders of preference shares are entitled to their dividend before ordinary shareholders and rank above ordinary shareholders should the company be wound up. Preference shares are share capital but not equity share capital.
Preliminary Results Statement
The first release to the stock exchange of a company's results for its full financial year. Sometimes abbreviated to prelims.
Pretax profit
All income (or loss) before tax.
R
Research and Development costs.
Revenue (or Turnover)
Revenue comprises the invoiced value of goods and services supplied by the Group excluding intragroup transactions.
ROOC
Return on Operating Capital is calculated at comparable exchange rates as OPBIT divided by capital employed excluding goodwilll, net pensions deficit, non-operating provisions and net taxation liabilities.
S
Common shares outstanding.
Shareholders Funds
A measure of the shareholders' total interest in a company represented by the total share capital plus reserves
T
Total Shareholder Return, a measure used to compare the performance of different companies over time. It combines share price appreciation and dividends paid to show the total return to the shareholder.
U
The United Nations Global Compact is a global corporate citizenship initiative and is a framework for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, the environment and anti-corruption. Invensys has been a participant since 2001.
Y
The Rate of return gained on an investment. It also refers to the dividend payable on a share (and is expressed as a percentage of the market price).
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