Key ratio definitions

Capital indicators

Net assets - Total assets exclusive of liquid funds and interest-bearing financial receivables less operating liabilities, non-interest-bearing provisions and deferred tax liabilities.

Operating working capital - Inventories and trade receivables less trade payables.

Working capital - Current assets exclusive of liquid funds and interest-bearing financial receivables less operating liabilities and non-interest-bearing provisions.

Net debt - Total interest-bearing liabilities less liquid funds.

Interest-bearing liabilities - Long-term and short-term borrowings and fair value derivative liabilities. 

Liquid funds - Cash and cash equivalents, short term investments and fair value derivative assets.

Net debt/equity ratio - Net debt in relation to total adjusted equity.

Equity/assets ratio - Equity as a percentage of total assets.

Capital employed - Total liabilities and equity less non-interest-bearing debt including deferred tax liabilities.

Other definitions

Adjusted - As reported adjusted for items affecting comparability, changes in exchange rates and acquisitions/divestments.

Average number of shares - Weighted number of outstanding shares during the period, after repurchase of own shares.

Earnings per share - Income for the period divided by the average number of shares.

Net sales growth - Net sales as a percentage of net sales the preceding period.

Gross margin - Gross operating income as a percentage of net sales.

Operating margin - Operating income as a percentage of net sales.

Return on equity - Income for the period as a percentage of average equity.

Return on capital employed - Operating income plus financial income as a percentage of average capital employed.

Operating cash flow - Total cash flow from operations and investments, excluding acquisitions and divestment of operations.

Capital expenditure - Capitalization of property, plant and equipment and product development and software.

EBITDA - Earnings before interests, taxes, depreciation impairment and amortization.

Value creation - Operating income less the weighted average cost of capital (WACC) on average net assets: (Net sales - operating costs - operating income) - (WACC x average net assets).

Interest coverage ratio - Income after financial items plus financial costs divided with financial costs.


Some of the historical key figures for 2006 are calculated pro forma or based on combined financial statements.