A

Accounting Policies

Specific principles, bases, conventions, rules and practices adopted by an enterprise in preparing and presenting Financial Statements.

Accrual Basis

Recording revenues and expenses in the period in which they are earned or incurred regardless of whether cash is received or disbursed in that period.

Actuarial Gain/Loss on Defined Benefit Plan

Gain or loss arising from the difference between estimates and actual experience in an entity’s defined benefit plan.

Assets Turnover

Revenue divided by average total assets.

 

C

Capital Employed

Total assets less interest free liabilities.

Capital Reserves

Profits of a company that, for various reasons, are not regarded as distributable to shareholders as dividends. These include gains on revaluation of capital assets.

Cash and Cash Equivalent

Short-term highly liquid assets those are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Contingencies

A condition or situation existing at the reporting date where the outcome will be confirmed only by occurrence or non-occurrence of one or more future events.

Current Ratio

Current assets divided by current liabilities.

 

D

Debt to Equity Ratio

Interest bearing borrowings divided by equity plus Debts.

Deferred Taxation

Sum set aside for tax in the accounts of an entity that will become liable in a period other than that under review.

Discount Rate

A rate used to place a current value on future cash flows. It is needed to reflect the fact that money has a time value.

Dividend Cover

Profit attributable to equity holders divided by gross dividend. Measures the number of times dividend is covered by distributable profit.

Dividend Payout Ratio

Dividends per share divided by earnings per share.

Dividend Yield

Dividend per share divided by the Closing Market Price

Dividend per Share (DPS)

Dividend Paid divided by the number of ordinary shares in issue and ranking for dividend.

 

E

Earnings per Share

Profits attributable to ordinary shareholders divided by the number of ordinary shares in issue and ranking for dividend.

EBIT

Earnings before interest and tax (Includes other operating income).

EBITDA

Earnings before interest, tax, depreciation and amortization.

Effective Rate of Taxation

Income tax including Deferred tax over Profit before tax.

Equity

Shareholders’ funds.

Earnings Yield

Earnings Per Share divided by Market Value per share

 

F

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Financial Instrument

A financial instrument is any contract that gives rise to both a financial assets in one entity and a financial liability or equity instrument in another entity.

 

G

Gross Profit Margin

Gross profit (revenue minus cost of goods sold) as a percentage of total revenue.

Gross Dividend

Portion of profits, inclusive of tax withheld, distributed to shareholders.

 

I

Interest Cover

Earnings before interest, tax, divided by finance expenses.

 

I

Market Capitalisation

Number of Shares in issue at the end of the period multiplied by the share price
at the end of the period.

 

N

Net Assets per Share

Shareholders’ funds divided by the number of ordinary shares issued.

Net Assets

Total assets minus long term and
current liabilities.

Net Profit Ratio

Profit after tax attributable to equity holders of the Company divided by total revenue.

Net Working Capital

Current assets minus current liabilities.

 

O

Operating Profit Margin

Operating Profit divided by turnover.

 

P

Profit Before Tax Margin

Profit Before Tax divided by turnover.

Profit After Tax Margin

Profit after tax divided by turnover.

Price To Book Value

Closing Market Value per share divided by Net Asset Per Share.

Price Earnings Ratio

Market price of a share divided by earnings per share.

Public Holding

Percentage of shares held by the public calculated as per the Colombo Stock Exchange Listing Rules as at the date of the Report.

 

Q

Quick Asset Ratio

Current Assets other than inventory divided by Current liabilities.

 

R

Related Parties

Parties who could control or significantly influence the financial and operating policies of the business.

Revenue Reserves

Reserves considered as being available for distributions and investments.

Return On Assets (ROA)

Net Profit of the year divided by Average Total Assets.

Return On Equity (ROE)

Net profit of the year divided by Average Equity.

Return On Capital Employed (ROCE)

Earnings before interest and tax as a percentage of average shareholders’ funds plus total debt.

 

S

Shareholders’ Funds

Total of issued and fully paid up capital and reserves.

 

T

Total Assets

Non-current assets plus current assets.

Total Debt

Long term loans plus short term loans and overdrafts.

Total Debt/Total Assets

Total Debt divided by Total Assets.

 

V

Value Additions

The quantum of wealth generated by the activities of the group and its application.

 

W

Working Capital

Capital required to finance the day to day operations (current assets minus current liabilities).