This section contains a useful list of terms and definitions
Actual Exchange Rate.
Anything owned by the Company having a monetary value; e.g. fixed assets such as buildings, plant and machinery, vehicles (these are not assets if rented and not owned) and potentially including intangibles such as trademarks and brand names, and current assets, such as inventory, debtors and cash.
Averaged using month-end balances and opening capital employed. Capital employed is the sum of net assets and net debt.
These provide a ‘snapshot’ at a date in time of who owns what in the Company, and what assets and debts represent the value of the Company.
The balance sheet is where to look for information about short-term and long-term debts, gearing (the ratio of debt to equity), reserves, inventory values (materials and finished goods), capital assets, cash, and the value of shareholders’ funds.
The balance sheet equation is:
Capital + Liabilities (where the money came from) = Assets (where the money is now)
Compounded Annual Growth Rate.
The movement of cash in and out of a business from day-to-day direct trading and other non-trading effects, such as capital expenditure, tax and dividend payments.
Low value components that are wrapped up into our supply proposition for a customer.
Constant Exchange Rate.
Cash and anything that is expected to be converted into cash within 12 months of the balance sheet date. For example, debtors or inventory.
Money owed by the business that is generally due for payment within 12 months of balance sheet date. For example: creditors, bank overdrafts or tax.
The proportion of cost relating to a capital item, over an agreed period, (based on the useful life of the asset), for example, a piece of equipment costing £10,000 having a life of five years might be depreciated over five years at a cost of £2,000 per year.
This would be shown in the income statement as a depreciation cost of £2,000 per year; the balance sheet would show an asset value of £8,000 at the end of year one, reducing by £2,000 per year; and the cash flow statement would show all £10,000 being used to pay for it in year one.
A dividend is a payment made per share, to a company’s shareholders and is based on the profits of the year, but not necessarily all the profits. Normally a half year dividend is recommended by a company board whilst the final dividend for the year is proposed by the board of directors and shareholders consider and vote on this at the Annual General Meeting.
Underlying diluted earnings per share over proposed dividend per share in the year.
There are several ‘Earnings before….’ ratios. The key ones being:
Earnings relate to operating and non-operating profits (e.g. interest, dividends received from other investments).
Generally Accepted Accounting Practice.
The ratio of debt to equity, usually the relationship between long-term borrowings and shareholders’ funds.
The General Data Protection Regulation is a regulation by which the European Parliament, the Council of the European Union, and the European Commission intend to strengthen and unify data protection for all individuals within the European Union. It also addresses the export of personal data outside the EU.
Any surplus money paid to acquire a company that exceeds its net assets fair value.
Institute of Chartered Accountants in England & Wales.
This is an intangible asset such as a copyright or patent.
Copyright is the exclusive right to produce copies and to control an original work and is granted by law for a specified number of years.
A patent is a government grant to an inventor, assuring the inventor the sole right to make, use and sell an invention for a limited period.
An LEI is a unique identifier for persons that are legal entities or structures including companies, charities and trusts. The obligation for legal entities or structures to obtain an LEI was endorsed by the G20 (the leaders of the 20 largest economies). Further information on LEIs, including answers to frequently asked questions, can be found here
MiFID applied in the UK from 2007, and was revised by MiFID II, in January 2018, to improve the functioning of financial markets in light of the financial crisis and to strengthen investor protection. MiFID II extended the MiFID requirements in a number of areas - new market structure requirements including:
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We use this term to include all Original Equipment Manufacturers (OEMs), Tier 1 suppliers in the automotive sector and relevant key sub-contractors in the other sectors we service.
The P/E ratio is an important indicator as to how the investing market views the health, performance, prospects and investment risk of a plc. The P/E ratio is arrived at by dividing the share price by the underlying diluted earnings per share.
The surplus remaining after total costs are deducted from total revenue.
The P&L shows how well the company has performed in its trading activities and would cover a trading account for a period.
The P&L shows profit performance and typically shows sales revenue, cost of sales/cost of goods sold, generally a gross profit margin, fixed overheads and/or operating expenses, and then a profit before tax figure (‘PBT’).
Business profit which is after tax and dividend payments to shareholders; retained by the business and used for reinvestment.
The accumulated and retained difference between profits and losses year-on-year since the company’s formation.
A fundamental financial performance measure. A percentage figure representing earnings before interest and tax against the money that is invested in the business.
Underlying EBIT ÷ average capital employed (net assets + net debt) × 100 = ROCE
The statements of cash flows show the movement and availability of cash through and to the business over a given period. For any business ‘cash is king’ and essential to meet payments for example to suppliers, staff and other creditors.
The balance sheet nominal value paid into the company by shareholders at the time(s) shares were issued.
A measure of the shareholders’ total interest in the company, represented by the total share capital plus reserves.
A stock code is used to find a listing on the regulatory market such as the London Stock Exchange. Trifast’s stock code is TRI
The name or a symbol used by a manufacturer or dealer to distinguish its products from those of competitors. A registered trademark is one that is officially registered and legally protected.
Current assets less current liabilities, representing the required investment, continually circulating, to finance inventory, debtors, and work in progress.