Glossary
Definitions of basic financial terms and abbreviations
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Term
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Definition
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Cash flow
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The amount of cash a company generates and uses during a period, calculated by adding non-cash charges (such as depreciation) to net income after taxes. Cash flow can be used as an indication of a company's financial strength.
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DVFA/SG
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Abbreviation for Deutsche Vereinigung für Finanzanalysten und Anlagenberater/Schmalenbach-Gesellschaft ? German Association of Financial Analysts and Investment Consultants/Schmalenbach Society. Usually refers to guidelines issued by the Association for adjusting annual net income in order to obtain comparable figures for net income per share
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Earnings per share
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Income per share after allowing for specific adjustments
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EBITDA
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Earnings before interest, taxes, depreciation and amortisation ? an indicator of a company's financial performance calculated as: = revenue - expenses (excluding taxes, interest, depreciation and amortisation)
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EBIT
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Earnings before interest and taxes ? an indicator of a company's financial performance calculated as: = revenue - expenses (excluding taxes and interest)
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EBT
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Earnings before taxes ? an indicator of a company's financial performance calculated as: = revenue - expenses (excluding taxes)
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Equity ratio
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The ratio of equity to the sum of all assets (balance-sheet sum)
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Goodwill
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The excess of the purchase price over the fair market value of an asset.
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Goodwill amortisation
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Method of determining the value of an enterprise as a whole
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IAS
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International Accounting Standards (IAS) ? a set of standards stating how particular types of transactions and other events should be reflected in financial statements. They are issued by the Board of the International Accounting Standards Committee (IASC).
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MDAX
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Mid-caps index operated by the German Stock Exchange (Deutsche Börse) and embracing the 50 biggest domestic companies
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PER, p/e ratio
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Price-earnings ratio or P/E ? the ratio of a company's current share price to its per-share earnings.
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SDAX
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Small-caps index operated by the German Stock Exchange (Deutsche Börse) and embracing small domestic companies
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