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Glossary

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Acid Test

 

Operating assets

the ratio of current assets excluding inventories to current liabilities.

total assets less investments, loans, deferred tax and cash.

 

Borrowings

 

Operating profit

all interest-bearing liabilities, including redeemable preference shares in subsidiaries.

is stated before goodwill impaired and capital items.

 

Borrowings ratio

 

Price : earnings ratio

the percentage of borrowings to fixed capital.

the market value per share divided by the headline earnings per share.

 

Capital employed

 

Return on capital employed

the total of fixed capital and borrowings.

the percentage of operating income to capital employed.

 

Current ratio

 

Return on operating assets

the ratio of current assets to current liabilities.

the percentage of operating profit to operating assets.

 

Earnings

 

Return on shareholders’ equity 

attributable earnings as disclosed in the income statement.

the percentage of attributable earnings to shareholders’ equity, adjusted for net capital items, goodwill impaired and translation gains/losses.

 

Fixed capital 

 

Total assets

shareholders’equity interest, plus minority shareholders’equity interest in subsidiaries.

property, plant and equipment, investments and loans together with current assets.

 

Headline dividend cover 

 
headline earnings per share divided by dividends per share.  

 

Market value per share

 
the sellers’ price quoted by the JSE Limited.  

 

Net asset value per share

 
shareholders’ equity divided by the number of shares in issue at year end.