New Wave Group AB Q3_2018_EN | Page 30

CAPITAL MEASURES DEFINITION/CALCULATION PURPOSE EQUITY The equity reported in the consolidated balance sheet consists of taxed equity increased by the equity portion of the Group's untaxed reserves and noncon- trolling interests. Deferred tax liability in untaxed reserves has been calculated at a 22.0 % rate for Swedish companies and at the applicable tax rate for foreign companies in each country outside Sweden. The measure is the difference between the Group's assets and liabilities, which corresponds to the Group's equity contributed by owners and the Group's accumulated profits. CAPITAL EMPLOYED Total assets less provisions and non-interest bearing liabilities, which consist of accounts payable, current tax liabilities, other liabilities and accrued expenses and prepaid income. The measure indicates how much capital is needed to run the business, regardless of type of financing (borrowed or equity). WORKING CAPITAL Total current assets, excluding liquid assets, less shortterm non-interest bearing liabilities. The measure is used to show how much capital is needed to finance day to day operations. NET DEBT Interest-bearing debt (current and non-current) less cash and cash equivalents. The measure shows financing from borrowings. STOCK TURNOVER Goods for resale in the income statement divided by average stock. The measure is used to show the inventory's turnover per year. NET DEBT TO EQUITY RATIO Net debt as a percentage of equity. The measure helps show financial risk and is useful for management to monitor the level of the company's indebtedness. NET DEBT IN RELATION TO WORKING CAPITAL Net debt divided by working capital. The measure is used to show how much of the working capital is financed through net debt. INTEREST COVERAGE RATIO Result before tax plus financial costs divided by financial costs. The measure is used to calculate the company's ability to pay interest costs. EQUITY RATIO Equity as a percentage of total assets. The measure shows how much of the company's assets are financed by the shareholders through equity. An equity ratio is a measure of financial strenght. DATA PER SHARE DEFINITION/CALCULATION PURPOSE EQUITY PER SHARE Equity at the end of the period divided by number of shares at the end of the period. Equity per share measures the net asset value backing up each share of the company's equity and determines if a company is increasing shareholder value over time. OTHER MEASURES DEFINITION/CALCULATION PURPOSE EFFECTIVE TAX RATE Tax on profit for the period as a percentage of result before tax. This measure enables comparison of income tax across locations where corporate taxes differ. CASH FLOW FROM OPERATIONS Cash flow from operating activities including changes in working capital and before cash flows from investing and financing activities. The measure is used to show the cash flow generated by the company's operations. NET INVESTMENTS Cash flow from investing activities according to the cash flow analysis which includes investments and divestments of buildings, acquisitions, invest- ments in tangible and intangible assets and raised long-term debt. The measure is used to regularly estimate how much cash is used to maintain operations and for expansion. 30