CAPITAL MEASURES DEFINITION/CALCULATION PURPOSE
EQUITY The equity reported in the consolidated balance sheet consists
of taxed equity increased by the equity portion of the Group's
untaxed reserves and non-controlling interests. Deferred tax lia-
bility in untaxed reserves has been calculated at the applicable
tax rates for the companies in each country, as decided and
communicated at the balance sheet date. The measure is the difference between the Group's
assets and liabilities, which corresponds to the
Group's equity contributed by owners and the
Group's accumulated profits.
CAPITAL EMPLOYED Total assets less provisions and non-interest bearing liabilities,
which consist of accounts payable, current tax liabilities, other
liabilities and accrued expenses and prepaid income. The measure indicates how much capital is needed
to run the business, regardless of type of financing
(borrowed or equity).
WORKING CAPITAL Total current assets, excluding liquid assets, less short-term
non-interest bearing liabilities. The measure is used to show how much capital is
needed to finance operating activities.
NET DEBT Interest-bearing liabilities (current and non-current) less cash
and cash equivalents. The measure shows financing from borrowings.
STOCK TURNOVER Goods for resale in the income statement divided by average
stock. The measure is used to show the stock's turnover per
year, since the stock is central for the Group to keep
a good service level, i.e. to be able to deliver goods
fast.
NET DEBT TO
EQUITY RATIO Net debt as a percentage of equity. The measure helps show financial risk and is useful for
management to monitor the level of the indebtedness.
NET DEBT IN RELATION
TO WORKING CAPITAL Net debt divided by working capital. The measure is used to show how much of the work-
ing capital is financed through net debt.
INTEREST COVERAGE
RATIO Result before tax plus financial costs divided by financial costs. The measure is used to calculate the Group's ability to
pay interest costs.
EQUITY RATIO Equity as a percentage of total assets. The measure shows how much of the Group's assets
are financed by the shareholders through equity. An
equity ratio is a measure of financial strength and how
the Group meets its targets.
OTHER MEASURES DEFINITION/CALCULATION PURPOSE
EFFECTIVE TAX RATE Tax on profit for the period as a percentage of result before tax. This measure enables comparison of income tax
across locations where corporate taxes differ.
EFFECTIVE INTEREST RATE Net financial items in relation to average net debt. The measure enables comparison of cost for the net
debt.
CASH FLOW FROM
OPERATIONS Cash flow from operating activities including changes in work-
ing capital and before cash flows from investing and financing
activities. The measure is used to show the cash flow generated
by the company's operations.
NET INVESTMENTS Cash flow from investing activities according to the cash flow
analysis which includes investments and divestments of build-
ings, acquisitions, investments in tangible and intangible
assets and raised long-term debt. The measure is used to regularly estimate how much
cash is used for investments in operations and for
expansion.
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