glossary of accounting terms
abs
Asset-backed securities. Asset-backed securities are bonds or notes that are collateralized with assets (usually receivables). Receivables of kuka Roboter GmbH are purchased within the framework of an abs program.
bric countries
Term that refers to the combination of Brazil, Russia, India and China.
Capital employed
Capital employed includes working capital as well as intangible assets and tangible fixed assets. Capital employed therefore represents the difference between operating assets and non-interest-bearing outside capital.
capm
The Capital Asset Pricing Model (capm) is a model for pricing an individual security or portfolio to determine a company’s cost of equity capital (see wacc).
Cash earnings
Cash earnings are a measurement for the inflow or outflow of cash from the operating profits (ebit). They are the resulting balance from operating profits, interest, taxes, depreciation as well as other non-payment-related expenses and income.
cgc
Corporate Governance Code: The German Government Commission’s list of requirements for German companies (since 2002).
Commitments
Payment obligation from purchases.
Continuing operations
Business activities still being pursued.
Corporate governance
Common international term for responsible corporate management and control that aims at creating long-term value.
dax
German stock index of blue chip companies. It includes the 30 largest German companies admitted to the Prime Standard in terms of market capitalization and volume of stocks traded.
Deferred taxes
Temporary differences between calculated taxes on the commercial and tax balance sheets designed to disclose the tax expense in line with the financial accounting income.
Derivatives
Financial instruments whose value is largely derived from a specified price and the price fluctuations / expectations of an underlying base value, e. g., exchange rates.
Discontinued operations
Business operations that will be or have been sold over the course of the fiscal year.
ebit
Earnings before interest and taxes.
ebit margin
ebit in relation to sales revenues.
Equity ratio
Ratio of equity to total assets.
Declaration of compliance
Declaration of the Executive Board and the Supervisory Board in accordance with article 161 of the German Corporation Act (AktG) regarding the implementation of the recommendations of the Government Commission in the German Corporate Governance Code.
Earnings per share
Earnings per share are calculated on the basis of Group consolidated earnings after taxes and the average number of shares outstanding for the year.
Exposure
A key figure used to assess risk. This key figure includes all incoming payments in a 90-day period prior to the record date of the down payments, payments based on percentage of completion or compensation after acceptance of the work carried out. In addition, the key figure also comprises all customer payments made within 90 days and which have not yet been supplied with deliveries / services including the sum of unpaid invoices following delivery or service supplied to the customer, the poc receivables and any purchase commitments.
Free cash flow
Cash flow from operating activities plus cash flow from investing activities. Free cash flow shows the extent of the funds generated by the company in the business year.
Free float
Shares of a public company owned by diverse shareholders.
General industry
General industrial markets not including the automotive industry.
hgb
German Commercial Code.
ias
International Accounting Standards.
ifric / sic
International financial reporting interpretation committee – interpreter of the international financial reporting standards ias and ifrs, formerly also sic. ifric is the new name for the Standing Intertpretations Committee adopted by the trustees of the iasc foundation in March 2002. sic was created in 1997 to improve the application and world-wide comparability of financial reports prepared in accordance with International Accounting Standards (ias). It outlines financial statement pratices that may be subject to controvery.
ifrs
International Financial Reporting Standards: The ifrs ensure international comparability of consolidated financial statements and help guarantee a higher degree of transparency.
map
kuka Aktiengesellschaft’s employee share program.
Market capitalization
The market value of a company listed on the stock exchange. This is calculated by taking the share price and multiplying it by the number of shares outstanding.
mdax
This stock index comprises the 50 largest German companies (after those of the dax) according to market capitalization and volume of stocks traded.
Net liquidity / Net debt
Net liquidity / net debt is a financial control parameter consisting of cash, cash equivalents and securities minus current and non-current financial liabilities.
Percentage of completion method (poc)
Accounting method of sales and revenue recognition according to the stage of completion of an order. This method is used for customer-specific construction contracts.
r&d expenses
Expenditures related to research and development.
Rating
Assessment of a company’s creditworthiness (solvency) determined by a rating agency based on analyses of the company. The individual rating agencies use different assessment levels.
roce
Return on capital employed (roce) it the ratio of the operating profit / loss (ebit) to the capital employed (see Capital employed). To calculate roce the capital employed is based on an average value.
Volatility
Intensity of fluctuations in share prices and exchange rates or changes in prices for bulk goods compared to market developments.
wacc
Weighted average cost of capital.
wacc = (E/V) * Re + (D/V) * Rd * (1–Tc)
where:
V = E + D
Re = cost of equity
Rd = cost of debt
Tc = corporate tax rate
D = market value of debt
E = market value of equity
V = total value of the company
Working capital
Working capital consists of the inventories, trade receivables, other receivables and assets, accrued items and the balance of receivables and payables from affiliated companies, as far as these are not allocated to financial transactions, minus other provisions, trade payables, other payables with the exception of liabilities similar to bonds and deferred income.
wphg
German Securities Trading Act.