Results Column



Acquisitions and Disposals. Is negative for Acquisitions and Positive for Disposals. Is the company regularly acquisitive? Does the EPS growth come from Acquisitions. Is the company disposing of its assets to turn into a cash shell or return cash to shareholders or are sudden disposals a sign of financial stress?

Adjusted EPS

Earnings Per Share calculated by dividing Net Profit minus Exceptionals and Goodwill by the Number of Shares. This is also known as Normalised EPS. Because it takes into account Exceptional Items, it should be a truer reflection of business performance than the Basic EPS, however in some companies Exceptional Items recur remarkably often. The closer the Basic EPS is to the Adjusted EPS the better the Earnings Quality. Adjusted EPS is used in the calculation of PER, PEG and EPS Growth.

Basic EPS

Earnings Per Share calculated by dividing the Net Profit by the Number of Shares. This is the strict EPS also known as FRS3 EPS. Because it does not take into account Exceptional items it tends to jump around from year to year far more than Adjusted EPS. The closer the Basic EPS is to the Adjusted EPS the better the Earnings Quality.


Capital Expenditure. Purchases and sales of assets. Subtracted from Net Cash Flow to give free Cash Flow used to calculate PFCF. Compare Capex with depreciation to see if assets are being replaced. The Capex figure tends to be quite volatile from year to year.


Cash and Short Term Investments. The most easily valued asset.

Current Liabilities

Creditors requiring payment in less than one year. This will include Bank Overdrafts, Debt due for payment, Hire Purchase, Trade Creditors, Dividend Payments and Accruals. Are the creditors rapidly increasing together with stocks and debtors? This may be a sign of overtrading.

Current Assets

The Working Capital of the Company. Receivables, Inventory, Cash and liquid investments.


Reduction in value of assets over time. Also includes amortisation of intangible assets excluding goodwill. Compare with the capital expenditure to see if assets are being replaced.


Dividend Per Share. The total Dividend Per Share for the year is shown for a Final Result. The Interim Dividend per Share is shown for an Interim Result.

Equity Funds

Equity Shareholders’ Funds. The Asset value of the company attributable to the Equity Shareholders. When compared with Market Capitalisation gives Price to Book Value (PBV). When added to Preferred Funds gives Shareholders’ Funds.

Exceptionals and Goodwill

Exceptional items are charges or credits that are expected to be non-repeatable for example sales of assets or restructuring charges. Goodwill Amortisation is the writing off over time of the excess value of a acquisition above its Asset Value. Exceptionals and Goodwill are excluded when calculating the Adjusted EPS. If Exceptionals are consistently at a very high level compared to profits then it is wise to treat the Adjusted EPS figure with caution and to look at the Basic EPS figure. Under IFRS accounting standards goodwill is no longer amortised.

Intangible Assets

Assets that do not have visible form such as Goodwill, Patents, Copyright or Mining Rights. Industries such as Media or Software companies often have valuable Intangible Assets. Care should be taken when valuing goodwill from acquisitions as often companies overpay and the goodwill subsequently becomes worthless. This is why many Value Investors will only consider Tangible Assets.


Group Net Interest payments or receipts. Excludes Interest payments by subsidiaries. Used to calculate Interest Cover. Interest is also shown in the cash flow statement.


Stock ready for sale or work in progress. Also known as Stocks. Care should be taken in valuation as for instance last year’s fashion items may be almost worthless. A sudden increase in stocks can be a sign that a product is not selling.


A Minority interest. This is when a parent company has one or more controlled subsidiaries that are not wholly owned. This is included when Gearing is calculated but not included in Price to Book Value.


Net Asset Value. The Value of Total Assets of a company minus total liabilities. Will equal Shareholders’ Funds.


Net Tangible Asset Value. The Value of Total Tangible Assets of a company minus total liabilities. Will equal Shareholders’ Funds minus Intangible Assets.

Net Cash Flow

Net Cash Inflow (or Outflow) from Operating Activities minus Finance Servicing and Taxes. The Cash flow available for Capital Expenditure, Dividends, buy backs or paying off debt. Good positive cash flow is usually a very good sign for an investment. Used to calculate PCF.

Net Current Assets

Current Assets minus Current Liabilities. Shows the capital base of a company. Any company valued less than Net Current Assets is extremely cheap.

Net Debt

Interest bearing liabilities minus Cash and Short Term Investments. Is negative for Net Debt and Positive for Net Cash. Used to calculate Gearing. A high Net Debt compared to Assets or Market Cap is a dangerous sign except in stable industries such as Utilities or Tobacco.

Net Profit

Profit for the year after Exceptionals, Goodwill, Interest, Tax, Minority payments and Preference dividends but before ordinary dividends. Used to calculate the Basic EPS.

Non Current  Assets

Intangible Assets, Tangible Assets and other long term assets not used in the day to day running of the business.

Non-Current Liabilities

Creditors requiring payment in more than one year. This is usually mostly Long Term Debt.

Operating Cash Flow

Net Cash Inflow (or Outflow) from Operating Activities. This will be the Operating Profit plus Depreciation, Amortisation, Changes in Working Capital, Sales or Purchases of Assets and Write down of Assets. It shows the cash coming into a business before Interest payments, Taxes, Capital Expenditure of Dividends. Used to calculate the Operating Cash flow Yield.

Operating Profit

Group Operating Profit. The profit a company makes after deducting sales and administrative expenses but before interest payments, taxes, exceptional items and goodwill amortisation. Does not include profits from subsidiaries. Is used to calculate interest cover.

Other Current

Other Current Assets. Can include Current Assets Investments, Pensions Credits or Deferred Tax amongst other items.

Other Non-Current

Other Non Current Asset Items. Can include Joint Ventures, Investments, Assets held for Resale and other items.

Pension Deficit

The Defined Benefit Pension Deficit or Surplus. Note that this shows the balance sheet deficit or surplus, not the acturial valuation deficit used to calculate actual pension payments. This may well be larger. The total assets and liabilities of the pension fund also need to be examined. The data generally goes back to 2005 when IFRS was brought in an companies were required to show pension information on the balance sheet.

Preferred Funds

The Value of Preference Shares, also known as Non-Equity Shareholders’ funds or Prefs. When added to Equity Shareholders’ Funds gives Shareholders’ Funds.


An amount retained to provide for a liability or loss which is either likely to be incurred, or certain to be incurred but uncertain as to the amount or as to the date on which it will arise.

Profit Before Tax

Profit before tax, but after interest payments, exceptionals and goodwill amortisation.


Amounts owing to the company also known as Accounts Receivable or Debtors. May be less than stated due to bad debts. Watch out for debtors increasing in comparison with trade creditors as it can indicate poor cash flow management.

Retained Earnings

The retained earnings of a company out of which dividends are paid.



Group Revenue. Also described as Sales or Turnover. Does not include Revenue of subsidiaries or Sales Taxes. Is used to calculate PSR and EV/Sales

Tangible Assets

Assets with a visible form such as Plant, Machinery and Property. Their true value can vary widely from that quoted.


Taxation charge or refund in the profit and loss statement or in the cash flow statement.