# Formulas & definitions (list)

## Explanation of items and the used formulas within the ValueModel

### Quick jump to: P&L – Supplemental – BS: Assets – BS: Liabilities

__P&L (YE Dec, CNY m)__

Profit and loss section of the income statement.

**Revenue**

** Definition:** Revenue is also referred to as Sales. The accumulation of sales of all of the different products and services of a business

** Formula: **(1 + Revenue growth (%)) x Previous year’s Revenue

** Forecast: **Forecast by applying a growth rate to prior year’s sales

** **

**Cost of goods & services**

** Definition: **Sum of the costs directly attributable to producing the products for sale

** Formula: **(1 – Gross profit margin (%)) x Revenue

** Forecast: **A change in the revenue growth (%) or the gross profit margin (%)

**Gross profit**

** Definition: **The first measure of profit in a business, showing what is left over after all costs directly attributed to making the products have been deducted.

** Formula: **Revenue – Cost of goods & services

** Forecast: **A change in the revenue growth (%) or the gross profit margin (%)

**Sales, general & administrative expenses (SG&A)**

** Definition:** Sum of the costs related to marketing and selling products and administering the business apart from COGS

** Formula: **SG&A/Sales (%) x Revenue

** Forecast: **SG&A as a percentage of the current year’s Revenue. SG&A-to-Sales ratio is given by dividing the SG&A by Sales, and this ratio from previous years can be a guide.

**Other operating (expense)/income**

** Definition:** Income or expense not related to the company’s core business operations

** Formula: **Other non-operating inc/(exp) (%) x other non-operating inc/(exp) from previous period

** Forecast: **A growth rate in other non-operating inc/(exp) compared to the previous period

**Earnings before interest & taxes (EBIT)**

** Definition:** EBIT is profit after deducting all operating expenses (COGS, SG&A and Other operating expenses). It is also referred to as Operating profit

** Formula: **Gross profit – SG&A – Other operating (expense)/income

Changes in forecast variables that affect Revenue and operating costs

**Interest expenses**

** **** Definition:** Non-operating expense that represents interest paid on all types of interest-bearing borrowing

** Formula: **(Interest rate – Paid (%) x Average ending LT debt from current to previous year) + Previous year’s Overdraft & Short-term debt

** Forecast: **A change in the LT borrowing growth (%), Current portion of LT debt/Total LT debt (%) or Interest rate – Paid (%)

**Interest income**

** Definition:** Interest earned on cash and other investments held at banks

** Formula: **Interest rate – Earned (%) x Previous year’s Cash & ST investments

** Forecast: **Adjust the percentage of interest expected to be earned on Cash & ST investments. Forecasting variables that have an impact on the size of Cash & ST investments

**Other non-operating income/(expense)**

** Definition:** Income or expense that is not related to the company’s core business operations

** Formula: **Other non-operating income/(exp) (%) x Previous year’s Other non-operating income/(expense)

** Forecast:** By applying a growth rate to prior year’s Other non-operating income/(expense)

**Earnings before taxes (EBT)**

** Definition:** EBT is the money earned by the firm before deducting the tax expenses

** Definition:** EBIT – Int expenses + Int income + other non-operating income/(expense)

** Forecast:** Changes in forecast variables that affect interest expense, interest income and other non-operating income/(expense)

**Income tax**

** Definition:** Corporate income tax paid for the period

** Formula: **Effective tax rate (%) x Earnings before taxes (EBT)

** Forecast: **A change in corporate income tax due to government policy

**Earnings after taxes (EAT)**

** Definition:** EAT is profit after deducting corporate income tax

** Formula: **Earnings before taxes (EBT) – Income tax

** Forecast: **Changes in forecast variables that affect Revenue, expenses and income tax

**Equity income from associates**

** Definition:** Income generated from investments in other companies where the company owns more than 20% of the shares outstanding in that company but less than 50% thus it is without controlling power—associate. If more than 50% is owned, so the company has a controlling interest, the investment is a subsidiary.

** Formula: **P&L equity income/BS LT investment (%) x Previous year’s LT investments

** Forecast: **The change in percentage of equity income from associates to LT investment

**Minority interest**

** Definition:** The profit or loss attributable to the minority owners is adjusted in the minority interest. Also known as non-controlling interest, it is the portion of a subsidiary’s stocks that is not owned by the parent company.

** Formula: **Minority interest/net profit excluding minority interest (%) x (Earnings after taxes (EAT) + Equity income from associates + Foreign exchange gain/(loss) before tax + Exceptional items before tax)

** Forecast: **A change in P&L equity income/BS LT investment (%)

**Earnings from continuing operations**

** Definition:** Profit that is earned from ongoing and recurring business operations

** Formula: **Earnings after taxes (EAT) + Equity income from asssociates – Minority interest

** Forecast: **Any forecast variables that have an affect on the P&L statement as above except the foreign exchange gain/(loss) before tax and Exceptional items before tax

**Foreign exchange gain/(loss) before tax**

** Definition:** Unrealized gain or loss on currency caused by a change in exchange rate before tax deduction

** Formula: **(1 + Foreign exchange gain/(loss) growth (%)) x Previous year’s Foreign exchange gain/(loss)

**A growth rate of Foreign exchange gain/(loss) growth (%)**

**Forecast:**

**Exceptional items before tax**

** Definition:** Gain or loss that is unpredictable and unlikely to happen again. Also referred to as one-off items or extra ordinary items

** Formula: **(1 + Exceptional items growth (%)) x Previous year’s Exceptional items

** Forecast: **Forecast by applying an Exceptional items growth to prior year’s exceptional items

**Net profit**

** Definition:** Showing the final profit that is left to be kept as retained earnings and/or distributed to the owners

** Formula: **Earnings from continuing operations – Foreign exchange gain/(loss) before tax – Exceptional items before tax

** Forecast: **Any forecast variables for P&L that will effect on the net profit

__Supplemental (YE Dec, CNY m)__

__Supplemental (YE Dec, CNY m)__The supplemental section is an additional information for P&L statement that focuses on after-tax items.

**Operating profit ex depre:**

**Operating profit (EBIT)**

** Definition:** EBIT, see P&L above

** Formula: **P&L Earnings before interest & taxes (EBIT)

** Forecast: **Changes in forecast variables that affect Revenue and operating costs

**Depre & Amort**

** Definition:** Depreciation and amortization are methods to distribute the cost of an asset throughout the asset’s life. E.g. You buy an asset for 100 and it shuld be linearly depreciated over 10 years. In year 1 the depreciation is 10, in year 2 the depreciation is 10,…,until year 10 when the asset will be fully depreciated and have 0 value in the balance sheet

** Formula: **Depreciation + Amortization

** Forecast: **A change in Gross fixed asset growth (%) or Average years assets are depreciated

**Earnings bef int, taxes, depre & amor (EBITDA)**

** Definition:** EBIT + adding back Depreciation and amortization. EBITDA is about measuring the operational performance of the company. It excludes the impact from decisions related to financing, accounting, and tax as the company may not have control over it or it’s not

** Formula: **Operating profit (EBIT) + Depre & Amort

** Forecast: **All forecast variables that have an impact on the Revenue, Operating costs and Depre & Amort

**Recurring profit calculation:**

**Earnings derived from reported FDEPS**

** Definition:** FDEPS = Fully Diluted Earnings Per Share. The Earnings or Net profit is calculated in this way to account for potential share dilution, i.e. the number of outstanding shares have increased. More shares leads to less earnings per share, keeping earnings constant.

** Formula: **P&L Net profit

** Forecast: **Any forecast variables for P&L will affect on the net profit same as in P&L statement

**Add: Exceptional items after tax**

** Definition:** See Exceptional items before tax in P&L above. Here it has been adjusted for income tax.

** Formula: **(-) P&L Exceptional items x (1 – Effective tax rate (%))

** Forecast: **A change in Effective tax rate (%) or Exceptional items growth (%)

**Recurring profit before forex adjustment**

** Definition:** Profit that is predictable and/or likely to continue, before adjustments related to currency exchange rates

** Formula: **Earning derived from reported FDEPS + Exceptional items after tax

** Forecast:** Forecast variables that effect on Net profit, Exceptional items and Effective tax rate (%)

**Add: Foreign exchange loss/(gain) after tax**

** Definition:** The Foreign exchange gain/(loss) from P&L above but adjusted for income tax

** Formula: **(-) P&L Forex gain/ (loss) before tax x (1 – Effective tax rate (%))

Forecast: A forecast variable that has impact on the Foreign exchange gain/(loss) before tax item in P&L statement, which will be Foreign exchange gain/(loss) growth (%)

**Recurring profit after tax**

** Definition:** Company’s profit after tax that is predictable and/or likely to continue

** Formula: **Recurring profit before forex adjustment + Foreign exchange gain/(loss) before tax

** Forecast:** Changes in Effective tax rate or all forecast variables that effect on the items on the supplemental of P&L statement

__Balance sheet: Assets (YE Dec, CNY m)__

__Balance sheet: Assets (YE Dec, CNY m)__Resources owned by a company which are expected to produce future economic benefits.

**Cash & short-term investments**

** Definition:** The amount of cash the company has in its accounts and short-term investments that are considered very liquid and can quickly be turned into cash

** Formula: **Cash & short-term investment/sales (%) x Revenue

** Forecast:** A change in Cash & short-term investment/sales (%)

**Accounts receivable**

** Definition:** The payment amount held by a business for goods or services that clients have not yet paid for, i.e. unpaid invoices that the company has outstanding to its clients

** Formula: **Receivables collection period (Days)/360 x Revenue

** Forecast:** A change in Receivables collection period (Days)

**Inventory**

** Definition:** Raw materials and supplies, products that are in production, and finished goods. This part of the company’s assets is expected to be ready or soon be ready to be sold.

** Formula: **Inventory conversion period (Days)/360 x Cost of goods & services

** Forecast:** Changes in Inventory conversion period (Days) or Cost of goods & services

**Other current assets**

** Definition:** Other assets that are considered liquid and could be converted into cash within a year

** Formula: **Other current assets/sales (%) x Revenue

** Forecast:** Other current assets as a percentage of the current year’s Revenue. Other current assets-to-Sales ratio is given by dividing the Current assets by Sales, and this ratio from previous years can be a guidance.

**Total current assets**

** Definition:** The total value of all liquid assets that can be turned into cash within one year

** Formula: **Cash & short-term investment + Account receivable + inventory + Other current assets

** Forecast: **All forecast variables that effect on the current asset items as above

**Long-term investments**

** Definition:** The company’s investments that tend to be held for more than a year, e.g. investments in stocks (can be ownership in associates), bonds, real estate

** Formula: **Net new long term investment (local currency) + Previous year’s Long-term investment

** Forecast:** A change in Net new long-term investment (local currency)

**Begin gross fixed assets**

** Definition:** Gross fixed assets from previous year

** Formula: **Previous year’s Gross fixed assets

**Capital expenditures (CAPEX)**

** Definition:** Funds used to invest in new projects, buy or upgrade physical assets, e.g. property, plants, and equipment.

**Formula: ***It will automatically adjust the value in the model and highlight it in black*

** Forecast: **It will automatically adjust the value in the model and it highlighted in black. But a change in Gross fixed asset (%) will effect on this item

**Other fixed asset changes**

** Definition**: Other changes in fixed assets that is not CAPEX

**Formula: ***It will automatically adjust the value in the model and it highlighted in black*

** Forecast:** –

**Net change in gross fixed assets**

** Definition:** Sum of CAPEX and Other fixed asset changes

** Formula: **Capital expenditures (CAPEX) – Other fixed asset changes

** Forecast: **Automatically calculate with changes in Capital expenditures (CAPEX) or Other fixed asset changes

**Gross fixed assets**

** Definition:** The ending value of gross fixed assets before Depreciation

** Formula: **Begin gross fixed asset – Net change in gross fixed assets

** Forecast:** A change in Gross fixed asset growth (%)

**Begin accumulated depreciation**

** Definition:** Beginning accumulated depreciation is the net accumulated depreciation from previous years. E.g. You buy an asset for 100 and it should be linearly depreciated over 10 years. In year 1 the depreciation is 10, in year 2 the depreciation is 10, if we now are in Year 3 the beginning accumulated depreciation is Year 1 depreciation + Year 2 depreciation = 20

** Formula: **Previous year’s Accumulated depreciation

** Forecast:** –

**Add: Depreciation charge**

** Definition:** The depreciation charge for all assets that should be depreciated for the current year

** Formula: **Average Current year’s Gross fixed asset and Previous year’s Gross fixed asset/Average years assets are depreciated

** Forecast:** A change in Average years assets are depreciated

**Other changes in accumulated depreciation**

** Definition:** Other changes in accumulated depreciation

**Formula: ***It will automatically adjust the value in the model and it highlighted in black*

** Forecast:** –

* *

**Accumulated depreciation**

** Definition:** Depreciation charges cumulated over the years for assets that are in use (still on the balance sheet) in the company

** Formula: **Begin accumulated depreciation + Depreciation charge + Other changes in accumulated depreciation

** Forecast:** Changes in Gross fixed asset growth (%) or Average years assets are depreciated

**Begin assets under construction**

** Definition:** Ending assets under construction from previous year

** Formula: **Previous year’s Asset under contruction

**Forecast: –**

**Net change**

** Definition:** Sum of changes in assets under construction during the current year

** Formula: **Growth in asset under construction (%) x Begin Assets under construction

** Forecast:** A change in Growth in assets under construction (%)

**Assets under construction**

** Definition:** Tangible assets that are not yet finished, e.g. buildings or equipment that takes a longer time to build

** Formula: **Begin assets under construction + Net change

** Forecast:** A change in Growth assets under construction (%) compare to the Begin assets under construction

**Fixed assets**

** Definition:** Long-term tangible assets that are not expected to be consumed or converted into cash for at least one year. The assets the company uses to produce its income.

** Formula: **Gross fixed assets – Accumulated depreciation – Assets under construction

** Forecast:** Changes in any forecast variables that impact on the assets

**Begin net intangible assets**

** Definition:** Ending intangible assets from the previous year

** Formula: **Previous year’s Intangible assets

**Forecast: –**

**Increase/(Decrease) in intangible assets**

** Definition:** A change of intangible asset value from the previous year

** Formula:** New intangible assets/Beg intangible assets (%) x Begin net intangible assets

** Forecast: **Forecast by applying new intangible assets/beg intangible assets (%) to prior year’s intangible assets

**Less: Amortization charge**

** Definition:** The amortization for all intangible assets for the current year

** Formula: **Intangible assets utilization (Years) x Begin net intangible assets

** Forecast:** Changes in the intangible asset utilisation (Years)

**Intangible assets**

** Definition:** An asset that is not physical in nature, including intellectual property, patents, trademarks, and copyrights

** Formula: **Begin net intangible assets + increase/(Decrease) in intangible assets – Amortization charge

** Forecast:** Any forecast variables that effect on Intangible assets

**Begin net goodwill**

** Definition:** Ending goodwill from the previous year

** Formula: **Previous year’s Goodwill

** Forecast**: –

**Increase/(Decrease)**

** Definition:** Sum of changes in goodwill during the current year

** Formula: **Growth in goodwill (%) x Begin net goodwill

** Forecast:** Change in a Growth in goodwill (%)

**Goodwill**

** Definition:** Sum of changes in goodwill during the current year

** Formula: **Begin net goodwill + Increase/(Decrease)

** Forecast:** All forecast variables that impact on the value of Goodwill

**Other long-term assets**

** Definition:** Other assets that are not classified as investments, property, plant, equipment, or intangible assets, e.g. bond issue costs, long-term prepayments, prepaid pension costs

** Formula: **Other asset growth (%) x Previous year’s Other long-term assets

** Forecast:** Forecast by applying a Other asset growth (%) to prior year’s other assets

**Total assets**

** Definition:** The total amount of asset that owned by a company including current, long-term asset, intangible asset, goodwill and others

** Formula: **Total current assets + Long-term investments + Fixed assets + Intangible assets + Goodwill + Other assets

** Forecast:** Changes in Current Assets, Long-term investment, Fixed asset, Intangible assets, Goodwill and Other Asset

__Balance sheet: Liabilities (YE Dec, CNY m)__

__Balance sheet: Liabilities (YE Dec, CNY m)__Obligations of a company to outside parties resulting from business or financing activities.

**Overdrafts & short-term debt**

** Definition:** An account made up of any debt incurred by a company that is due within one year

**Formula: ***It will automatically adjust the value in the model with auto cash balance which hidden in forecast section*

** Forecast:** –

**Current portion of long-term debt**

** Definition:** The amount of long-term debt that is due within one year

** Formula: **Current portion of LT debt/Total LT debt (%) x Ending Long-term debt

** Forecast:** A change in percentage of current portion of LT debt to Total LT debt

**Accounts payable**

** Definition:** This account is the amount of money owned by the company to its suppliers. This happens when the company buys on credit, i.e. the supplier has an invoice outstanding to the company

** Formula: **Payable deferral period (Days)/360 x Cost of goods and services

** Forecast: **Changes in either Cost of goods and services or Payable deferral period (Days)

**Other current liabilities**

** Definition:** Any other liabilities incurred by a company that are due within one year

** Formula: **Other current liabilities/sales (%) x Revenue

** Forecast:** Forecast by applying Other current liabilities/sales (%) to sale for Current Revenue

**Total current liabilities**

** Definition:** Total amount of liabilities that are due within one year

** Formula: **Overdrafts & short-term debt + Current portion of long-term debt + Account payable + Other current liabilities

** Forecast:** Any forecast variables that impact on current liabilities as above

**Begin long-term debt**

** Definition:** Ending long-term debt from previous year

** Formula: **Previous year’s Ending LT debt

** Forecast:** –

**Increase/(Dec) in long-term debt**

** Definition:** Increase/decrease amount in long-term debt during the year. For example: Increase can be a new bank loan or a new bond issuance. Decrease can be repayment of a bank loan.

** Formula: **Long-term borrowing growth(%) x (Previous year’s Current portion of Long-term debt + Previous year’s Long-term debt minus current portion of LT debt )

** Forecast:** Changes in the Long-term borrowing growth (%) or Current portion of LT debt/Total LT dent (%)

**Other items**

** Definition:** Sum of uncategorized items

**Formula:***It will automatically adjust the value in the model and it highlighted in black*

**Forecast: –**

* *

**Ending long-term debt**

** Definition:** The sum of liabilities which are not going to be paid off within a year and usually used to finance different types of longer term investments

** Formula: **Begin long-term debt + Increse/(Dec) in long-term debt + Other items

** Forecast:** Same forecast variables that impact on the long-term debt

**Less: Current portion of long-term debt**

** Definition:** The portion of long-term debt that needs to be paid within one year

** Formula: **Current portion of long-term debt

** Forecast:** –

**Long-term debt minus current portion of LT debt**

** Definition:** After deducting current portion of long-term debt, the leftover is available to be paid over next year

** Formula: **Ending LT debt – Current portion of LT debt

** Forecast:** Applying Current portion of LT debt/Total LT Debt (%)

**Other long-term liabilities**

** Definition:** Other liabilities which are not going to be paid off within a year

** Formula: **Other non-current liabilities growth (%) x Previous year’s Other non-current liabilities

** Forecast:** A change in Other non-current liabilities growth (%)

**Total liabilities**

** Definition:** Total amonunt of the company’s financial debt or obligations to be paid to creditors

** Formula: **Total current liabilities + LT debt minus current portion of LT debt + Other LT liabilities

** Forecast:** All forecast variables that effect on liabilities

__Balance sheet: Equity (YE Dec, CNY m)__

__Balance sheet: Equity (YE Dec, CNY m)__Specific information related to the firm’s shares.

**Minority interest**

** Definition:** Also known as non-controlling interest. This is the portion of a subsidiary’s stocks that is not owned by the parent company.

** Formula: **Previous year’s BS Minority interest – Current P&L Minority interest

** Forecast:** A change in Minority interest/net profit excluding minority interest (%)

**Paid-up capital – Common shares**

** Definition:** Money the company received from shareholders in exchange for common shares

** Formula: **Par value x (Ending shares/1 (Share divider))

** Forecast: **A change in Current year’s Par value or the shares outstanding

**Share premium – Common shares**

** Definition:** The paid-up capital exceeding the par value of common shares

** Formula: **New shares x (Avg. price shares were sold/bought that year (currency) – Par value)

** Forecast:** Changes in either the Avg. price shares were sold/bought that year in local currency or the shares outstanding

**Paid-up capital – Preferred shares**

** Definition:** Money the company received from shareholders in exchange for preferred shares

** Formula: **Par value x (Ending shares/1 (Share divider))

** Forecast:** A change in Current year’s Par value or the shares outstanding

**Share premium – Preferred shares**

** Definition:** The paid-up capital exceeding the par value of preferred shares

** Formula: **New shares x (Avg. price shares were sold/bought that year (currency) – Par value)

** Forecast:** Changes in either the Avg. price shares were sold/bought that year in local currency or the shares outstanding

**Warrants**

** Definition:** Derivatives that give its owner the right, but not the obligation, to buy or sell a security (most often a share in the company) at a certain price before the warrants’ expiration

** Formula: **(Warrant growth (%) x Previous year’s Warrant) + Previous year’s Warrant

** Forecast:** A change in Warrant growth (%)

**Total paid-up capital**

** Definition:** Total amount of money that a company has received from shareholders in exchange for shares of stock

** Formula: **Paid-up capital – Common shares + Paid-up capital – Preferred shares + Share premium – Common shares + Share premium – Preferred share + Warrants

** Forecast:** Any forecast variables that impact on the shares price or the numbers of shares

**Beginning retained earnings**

** Definition:** Retained earnings (see below) from previous year

** Formula: **Previous year’s Retained earnings

** Forecast:** –

**Add: Net profit**

** Definition:** See Net profit in P&L

** Formula: **Net profit

** Forecast:** Any forecast variables for P&L items

**Accrued dividend – Common shares**

** Definition:** Dividend that is already booked but not yet paid out to common shareholders

** Formula: **(Dividend per share x Average common shares)/1 (Share divider)

** Forecast:** Change in Average common shares or Stock dividend – Common shares (%outstanding)

**Accrued dividend – Preferred shares**

** Definition:** Dividend that is already booked but not yet paid out to preferred shareholders

** Formula: **(Dividend per share x Average preferred shares) / 1 (Share divider)

** Forecast:** Change in Average preferred shares or Stock dividend – Preferred shares (%outstanding)

**Adjustments**

**Definition: ***Catches all account for any uncategorized items*

**Formula: –**

*Forecast: –*

* *

**Retained earnings**

** Definition:** Portion of net profit that is not paid out as dividends, but retained by the company for future investments in the business

** Formula: **Beginning retained earnings + Net profit + Accrued dividends + Adjustments

** Forecast:** Any forecast variables that impact on the net profit or a company’s dividend policy e.g. dividend payout ratio (%) and Stock dividend (% outstanding)

**Unrealized investment gain/(loss)**

** Definition:** Amount of gain or loss from investments that has not yet been realized. For example, if the company’s accounting standards are to book to market value at the end of the year and they have bought a share in another company for 100. If the share by the end of the year trades at 90, the company will have an unrealized investment loss of 10

** Formula: **(1 + Unrealized investment gain/(loss) growth(%))x Previous year’s Unrealized investment gain/(loss)

** Forecast**: A change in Unrealized investment gain/(loss) growth (%)

**Revaluation/Foreign exchange/Others**

** Definition:** Revaluation is when company reappraise its assets (normally fixed-assets), e.g. lands, building. It’ll book the gain or revaluation to equity

** Formula: **(1 + Revaluation/forex/others growth (%)) x Previous year’s Unrealized investment gain/(loss)

**A change in Revaluation/forex/others growth (%)**

**Forecast:**

**Total shareholders’ equity**

** Definition:** Total amount of both current and long-term liabilities plus total shareholders’ equity

**Total paid-up capital + share premium + warrant) + (Retrained earnings + Unrealized investment gain/(loss) + Revaluation/Forex/Others)**

**Formula:**** Forecast:** All forecast variables that effect on Shareholders’ equity except Minority interest

**Total liabilities and shareholders’ equity**

** Definition:** Total amount of both current and long-term liabilities plus total shareholders’ equity

** Formula: **Total liabilities + Total shareholders’ equity

** Forecast:** Any forecast variables that changes any items on the Total shareholders’ equity or Total liabilities

110. **Check: This must equal zero**

** Definition:** Model feature that controls so the balance sheet balances

** Formula: **Total Asset – Total liabilities and shareholders’ equity

** Forecast:** –

__Supplemental (YE Dec)__

__Supplemental (YE Dec)__Additional information on the shareholder’s equity statement

**Share detail (m):**

**Outstanding common shares**

** Definition:** Total number of common shares outstanding

** Formula: **Ending shares (Common shares)

** Forecast:** A change in numbers of shares can effect on the common shares outstanding

**Outstanding preferred shares**

** Definition:** Total numbers of preferred shares outstanding

** Formula: **Ending shares (Preferred shares)

** Forecast:** A change in numbers of shares can effect on the preferred shares outstanding

**Total shares**

** Definition:** Total numbers of common and preferred shares outstanding

** Formula: **Outstanding common shares + Outstanding preferred shares

** Forecast:** Changes in either common or preferred shares outstanding

**Simple average**

** Definition:** Average of total shares outstanding the current year and last year

** Formula: **Total average shares

** Forecast:** Changes in either common or preferred shares outstanding

**Fully diluted shares**

** Definition:** The total number of shares that would be outstanding if all derivatives (e.g. warrants and stock options) or other instruments that can be converted in to shares were exercised

** Formula: **Fully diluted weighted average shares

** Remarks**: A change in share outstanding or average shares would effect on the fully diluted weighted average shares

**Per share data (CNY)**

**Reported earnings per share (EPS)**

** Definition:** The reported portion of company’s profit that is allocated to each common stock

** Formula: **Reported net profit/Total shares outstanding

** Forecast:** Changes in Total shares outstanding or Net profit

**Reported fully diluted EPS (FDEPS)**

** Definition:** The reported portion of company’s profit that is allocated to each common stock using Fully diluted shares

** Formula: **Unadjusted par value/ Current year’s Par value (local currency) / (1+ Stock dividend Common shares (%))

** Forecast:** Forecast by various variables such ash Stock dividend – Common shares (%), Par Value (local currency)

**Earnings per share (EPS)**

** Definition:** The portion of company’s profit that is allocated to each common stock

** Formula:** Net profit/Total average shares (m)

** Forecast:** Changes in Net profit or numbers of shares outstanding

**Recurring FDEPS bef forex adj**

** Definition:** The portion of company’s recurring profit that is allocated to each common stock using Fully diluted shares before adjusting for exchange rate impact

** Formula: **Recurring profit before forex adjustment / (fully diluted weighted average shares/1 (Share divider))

** Forecast:** Changes in Recurring profit before forex adjustment or Fully diluted weighted average shares

**Recurring FDEPS**

** Definition:** The portion of company’s recurring profit that is allocated to each common stock using Fully diluted shares

** Formula: **Recurring profit after tax / ((fully diluted weighted average shares/1 (Share divider))

** Forecast:** Changes in recurring profit after tax or Fully diluted weighted average shares

**Dividend per share (DPS)**

** Definition:** The amount of cash dividend the shareholders receive for each share they own

** Formula: **If Recurring FDEPS is zero, then uses Dividend payout ratio – Common shares (%) x Recurring FDEPS bef forex adj, if not then Dividend payout ratio common shares (%) x Recurring FDEPS

** Forecast:** Changes in Dividend payout ratio – Common shares (%), the value of Recurring FDEPS or Recurring FDEPS bef forex adj

**Dividend per share – Pref shares**

** Definition:** The amount of cash dividend the shareholders receive for each preferred share they own

** Formula: **If Recurring FDEPS is zero, then uses Dividend payout ratio – Preferred shares (%) x Recurring FDEPS bef forex adj, if not then Dividend payout ratio preferred shares (%) x Recurring FDEPS

** Forecast:** Changes in Dividend payout ratio – Prefered shares (%), the value of Recurring FDEPS or Recurring FDEPS bef forex adj

**Book value per share (BVPS)**

** Definition:** Total value of common shareholders’ equity per share

** Formula:** Total shareholders’ equity / (Total shareholders’ equity/1 (Share divider))

** Forecast:** Change in Total shareholder’s equity

__Cash flow (YE Dec, CNY m)__

Cash flows resulting from previous items.

**Net profit**

** Definition:** Net profit, see P&L

** Formula: **P&L Net profit

** Forecast:** Any forecast variables for P&L

**Depreciation**

** Definition:** Depreciation, see P&L Supplemental

** Formula: **BS Depreciation charge

** Forecast:** A change in Gross fixed asset growth (%) or Average years assets are depreciated

**Amortization**

** Definition:** Amortization, see P&L Supplemental

** Formula: **BS Amortization charge

Forecast: A change in New intangible assets/Beg intangible assets (%) or Intangible asset utilisation (Years)

**(Increase)/Decrease in the net working capital**

** Definition:** Change in the sum of all current assets minus current liabilities in a business, showing the short-term liquidity of a business

** Formula: **(Previous year’s Account receivable, Inventory and Other current assets – Current year’s Account receivable, Inventory and Other current assets) + (Current year’s in Account payable and Other current liabilities – Previous year’s in Account payable and Other current liabilities)

** Forecast:** All forecast variables that effect on the net working capital. See all items in the formula

**Other non-cash items**

** Definition:** Other items that are not cash such as a check, draft

** Formula: **Total change in Revaluation/Foreign exchange/Others – Increase/Decrease in goodwill + Total change in unrealized investment gain/(loss) – Equity income from associates

** Forecast:** See all items in the formula

**Operating cash flow**

** Definition:** The amount of cash generated by a company’s normal business operation

** Formula: **Net profit + Depreciation + Amortization + (Increase)/Decrease in net working capital + Other con-cash items

** Forecast:** Changes in all forecast variables that impact on the business operating activities

**Capital expenditures (CAPEX)**

** Definition:** CAPEX, see Balance Sheet above

** Formula: **Net change in gross fixed asset – Net change

** Forecast:** A change in the gross fixed asset growth (%) or Asset under contruction (%)

**(Increase)/Decrease of long-term investments**

** Definition:** Changes in long-term investments, see Balance Sheet above

** Formula: **Net new long term investment – Increase/decrease in goodwill

** Forecast:** Change in Growth in goodwill (%) or Net new long term investment (local currency)

**Other investments**

** Definition: **Catch all account for any uncategorized items

** Formula:** Current year’s Other long-term assets – Previous year’s Other long-term assets – Increase/(Decrease) in intangible assets

** Forecast:** Any forecast variables that impact on Intangible assets or Other long-term assets

**Investing cash flow**

** Definition:** The amount of cash the company received from or used to finance its investments

** Formula: **Capital expenditures (CAPEX) + (Increase)/Decrease of long-term investments + Other investments

** Forecast:** All forecast variables that impact on the CAPEX, (Increase)/Decrease of long-term investments or Other Investments

**Increase/(Decrease) in short-term debt**

** Definition:** Change in the amount of short-term debt from last period

** Formula: **Overdrafts & short-term debt – Previous year’s Overdrafts & short-term debt

** Forecast:** It is automatically adjust in the model

**Increase/(Decrease) in long-term debt**

** Definition:** Change in the amount of long-term debt from last period

** Formula: **Long-term debt minus current portion of LT debt + Current portion of long-term debt – Previous year’s Long-term debt minus current portion of LT debt – Previous year’s current portion of long-term debt

** Forecast:** All forecast variables that effect the long-term debt

**Dividends paid**

** Definition:** Total cash used to pay dividends to shareholders

** Formula: **Accrued dividend – Common shares + Accrued dividend – Preferred shares

** Forecast:** Changes in either Accrued dividend – Common shares or Accrued dividend – Preferred shares

**Change in equity**

** Definition:** Change in value of equity, e.g if a company raises capital through a new share issuance

** Formula: **(Current year’s Paid-up capital – Common shares + Share premium – Common shares + Paid-up capital – Preferred shares + Share premium preferred shares + warrants) – (Previous year’s Paid-up capital – Common shares + Share premium – Common shares + Paid-up capital – Preferred shares + Share premium preferred shares + warrants)

** Forecast:** Any forecast variables that will effect on the equity value and shares outstanding

**Others**

**Definition: ***Catches all accounts for uncategorized financing items*

** Formula: **Minority interest – Previous year’s Minority interest + (Other LT liabilities – Previous year’s Other LT liabilities)

** Forecast:** –

**Financing cash flow**

** Definition:** Cash that the company uses to finance both operating and investing activities either by debt or equity

** Formula: **Increase/(Decrease) in short-term debt + Increase/(decrease) in long-term debt + Dividends paid + Change in equity + Others

** Forecast:** Any change in short-term debt, long-term debt, Dividends paid or Change in equity

**Net inc/(dec) in cash and cash equivalents**

** Definition:** Net changes in liquid asset such as cash and other assets that can quickly be turned into cash

** Formula: **Operating cash flow + Investing cash flow + Financing cash flow

** Forecast:** All forecast variables that effect on the items on Operating cash flow, Investing cash flow and Financing cash flow

**Beginning cash**

** Definition:** Cash left in the firm from last year

** Formula: **Previous year’s Ending cash

**Adjustment for historic data**

**Definition: ***Adjustments in the model to deal with differences in historical data*

**Formula: ***It will automatically adjust the value in the model and highlight it in black*

* *

**Ending cash**

** Definition:** The amoung of cash the company has after operating, investing and financing activities

** Formula: **Net inc/(dec) in cash and cash equivalents + Adjustment for historic data + Ending cash

** Forecast:** Changes in any cash outflow or inflow for Cash flow statement

**Check: This must equal zero**

** Definition:** Model feature to check Cash flow statement

** Formula: **Ending cash – Cash & short-term investment

__Forecast variables: ____Profit & loss:__

**Revenue growth (%)**

** Definition:** Growth in the company’s sales from previous year

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**Gross profit margin (%)**

** Definition:** Margin that shows how much profit the company makes after production costs, indicating the pricing or cost control strategy

** Formula: **(Revenue – Cost of goods and services) / Revenue

** Forecast:** Plug in your estimated margin in %

**SG&A/sales (%)**

** Definition:** SG&A-to-sales ratio. Shows how much SG&A the company pays for each 100 in Sales

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

**Other operating income/(exp) growth (%)**

** Definition:** See P&L

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**EBIT margin (%)**

** Definition:** Percentage of operating profit to revenue, also it can measure a company’s pricing strategy and operating efficiency

** Formula:** Earnings before interest and taxes(EBIT)/Revenue

** Forecast: **This is a model output based on your forecasted input variables above

**Interest rate – Paid (%)**

** Definition:** Average interest rate paid on all interest-bearing debt

** Formula:** –

** Forecast: **Plug in your estimated percentage (%)

**Interest rate – Earned (%)**

** Definition:** Interest rate earned by held cash in the bank account or invest in other ST investment

** Formula:** –

** Forecast: **Plug in your estimated percentage (%)

**Other non-operating income/(exp) growth (%)**

** Definition:** See P&L

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

**Effective tax rate (%)**

** Definition:** Average tax rate paid

** Formula:** –

** Forecast: **Plug in your estimated percentage (%)

**Earnings after tax (EAT) margin (%)**

** Definition:** Margin that shows the company’s profit after tax

** Formula:** Earnings after tax(EAT)/Revenue

** Forecast: **This is a model output based on your forecasted input variables above

**P&L equity income/BS LT investments (%)**

** Definition:** See P&L and Balance sheet for definitions. Ratio shows how much equity income the company generates from 100 in long-term investments

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

**Foreign exchange gain/(loss) growth**

** Definition:** See P&L

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**Exceptional item growth**

** Definition:** See P&L

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**Net margin (%)**

** Definition:** The amount of net profit returned as percentage of revenue

** Formula:** Net profit/Revenue

** Forecast: **This is a model output based on your forecasted input variables above

**Net profit growth (%)**

** Definition:** Growth in net profit that is left for its owners compared to last period of time

** Formula:** (Net profit / Net profit from previous period – 1) x 100

** Forecast: **This is a model output based on your forecasted input variables above

**Minority interest/net profit excluding minority interest (%)**

** Definition:** See P&L and Balance sheet for definitions. Ratio is used to estimate the income/expense resulting from minority interest in the P&L

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

__Forecast variables: Assets__

**Cash & short-term investment/sales (%)**

** Definition:** See Balance sheet. Ratio shows how much the company keeps in cash from every 100 in sales

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

**Receivables collection period (days)**

** Definition:** Number of days it takes for a business to receive payments from its customers paying on credit

** Formula:** –

** Forecast: **Plug in numbers of days

**Inventory conversion period (days)**

** Definition:** How many days it takes for the company to produce a product, from it orders the raw material until it’s sold

** Formula:** –

** Forecast: **Plug in numbers of days

**Other current assets/sales (%)**

** Definition:** See Balance sheet.

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

**Net new long term investment (CNY m)**

** Definition:** Net amount (i.e. sum of additions and disposals) of long-term investment. Value in reported currency

** Formula:** –

** Forecast: **Plug in new long term investment in local currency

**Long-term investment growth (%)**

** Definition:** Changes in long-term investments calculated by the model

** Formula:** –

** Forecast: **This is non-forecast item but a change in net new long-term investment will effect on the long-term investment growth (%)

**Gross fixed asset growth (%)**

** Definition:** See Balance sheet.

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**Average year assets are depreciated**

** Definition:** Average numbers of years assets are depreciated over

** Formula:** –

** Forecast: **Plug in numbers of years

**Growth in assets under construction (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**Intangible asset utilization (Years)**

** Definition:** Average numbers of years until an intangible asset is fully depreciated

** Formula:** –

** Forecast: **Plug in numbers of years

**New intangible assets/Beg intangible assets (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

**Growth in goodwill (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**Other asset growth (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in your estimated growth in %

** **

**Total asset growth (%)**

** Definition:** Changes in the total assets from previous year calculated by the model

** Formula:** (Total assets – Previous year’s Total assets) / Previous year’s Total assets x 100

** Forecast: **This is a model output based on your forecasted input variables above

**Revenue per CNY100 of assets**

** Definition:** The ratio is known as Asset turnover or Asset utilization and measures the efficiency of a company: How much revenue is generated for every 100 in assets. Calculated by the model

** Formula:** Revenue/Average total assets

** Forecast: **This is a model output based on your forecasted input variables above

**Return on assets (%)**

** Definition:** How much net profit that is generated for every 100 in assets. Return on assets measures the profitability of a company and doesn’t take capital structure into account. Calculated by the model

** Formula:** Net income/Total assets

** Forecast: **This is a model output based on your forecasted input variables above

__Forecast variables: Liabilities__

**Current portion of LT debt/Total LT debt (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

**Payables deferral period (days)**

** Definition:** Average number of days it takes for the company to pay its suppliers when the company has purchased on credit

** Formula:** –

** Forecast: **Plug in numbers of days

**Other current liabilities/sales (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in your estimated ratio in %

**Long-term borrowing growth (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**Other non-current liabilities growth (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in your estimated growth in %

**BS minority int/total equity + minority interests**

** Definition:** See Balance sheet

** Formula:** (Minority interest / Net profit + Minority interest) x 100

** Forecast: **Non-forecast item

__Forecast variables: Shares__

**Common shares:**

** **

**Par value (CNY)**

** Definition:** Par value is mainly for legal purposes and is usually tiny. It represents a minimum amount that stockholders’ equity can’t drop below and was originally designed as a protection for creditors.

** Formula:** –

** Forecast: **A stock split will have impact on the Par value (local currency)

**Beginning shares (m)**

** Definition:** Number of outstanding commons shares as of previous year end

** Formula:** –

** Forecast: **This is non-forecast item.

**Add: New shares (m)**

** Definition:** An increase/decrease in number of common shares outstanding resulting from issuing new shares or buying back shares

** Formula:** –

** Forecast: **Change in the numbers of new shares issued by a company

**Avg. price shares were sold/bought that year (CNY)**

** Definition:** Ending number of common shares outstanding including new shares and stock dividend

** Formula:** –

** Forecast: **Plug in the average price shares were sold/bought that year in local currency

**Ending shares (m)**

** Definition:** A dividend payment made in form of additional common shares

** Formula:** –

** Forecast: **This is non-forecast item. But a change in Par value or the shares outstanding could effect on the ending shares

**Average shares (m)**

** Definition:** Average amount of common shares

** Formula:** –

** Forecast: **This is non-forecast item. But a change in the numbers of shares outstanding could have an impact

**Preferred shares:**

** **

**Par value (CNY)**

** Definition:** Shares held by shareholders with special rights (e.g. fixed dividend, higher claim on asset, no voting rights)

** Formula:** –

**Forecast: –**

**Beginning shares (m)**

** Definition:** Par value is mainly for legal purposes and is usually tiny. It represents a minimum amount that stockholders’ equity can’t drop below and was originally designed as a protection for creditors.

** Formula:** –

** Forecast: **This is non-forecast item. But a change in Previous year’s Par value or the shares outstanding could effect on the beginning shares

**Add: New shares (m)**

** Definition:** New shares issued by a company

** Formula:** –

** Forecast: **Changes in the numbers of new shares issued by a company

**Avg. price shares were sold/bought that year (CNY)**

** Definition:** An increase/decrease in number of preferred shares outstanding resulting from issuing new shares or buying back shares

** Formula:** –

** Forecast: **Plug in the average price shares were sold/bought that year in local currency

**Ending shares (m)**

** Definition:** A dividend payment made in form of additional preferred shares

** Formula:** –

** Forecast: **This is non-forecast item. But a change in Par value or the shares outstanding could effect on the ending shares

**Average shares (m)**

** Definition:** Ending number of preferred shares outstanding including new shares and stock dividend

** Formula:** –

** Forecast: **This is non-forecast item. But a change in the numbers of shares outstanding could have an impact

**Total average shares (m)**

** Definition:** Average of current year’s and previous year’s number of preferred shares outstanding

** Formula:** –

** Forecast: **Changes in Total average shares

**Fully diluted weighted average shares**

** Definition:** Total average shares outstanding of common and preferred shares

** Formula:** –

** Forecast: **Changes in either Par value or Total average shares

**Fully diluted multiplier**

** Definition:** See Balance sheet. Weighted average takes into consideration any changes in the number of outstanding shares over the reporting period

** Formula:** –

**Forecast:**

**Warrant growth (%)**

** Definition:** A growth of derivative instrument called warrant that issued by a company

** Formula:** –

** Forecast: **Plug in the growth rate (%)

**Dividend payout ratio – Common shares (%)**

** Definition:** The portion of dividends paid to common shareholders as a percentage of net income

** Formula:** –

** Forecast: **Applying the growth rate of prior’s Dividend payout ratio – Common shares (%) or changes in company’s dividend policy

**Dividend payout ratio – Preferred shares (%)**

** Definition:** The amount of dividends paid to preferred shareholders relative to the amount of net income

** Formula:** –

** Forecast: **Applying the growth rate of prior’s Dividend payout ratio – Preferred shares (%) or changes in company’s dividend policy

**Stock dividend – Common shares (% outstanding)**

** Definition:** The numbers of stocks paid for dividend relative to common shares outstanding

** Formula:** –

** Forecast: **Applying the growth rate of prior’s Stock dividend – Common shares (%outstanding) or changes in company’s dividend payment policy

**Stock dividend – Preferred shares (% outstanding)**

** Definition:** The numbers of stocks paid for dividend relative to preferred shares outstanding

** Formula:** –

** Forecast: **Applying the growth rate of prior’s Stock dividend – Preferred shares (%outstanding) or changes in company’s dividend payment policy

**Unrealized investment gain/(loss) growth (%)**

** Definition:** Increases or decreases in the value of an asset that has not been sold

** Formula:** –

** Forecast: **Plug in growth rate in percentage (%)

**Revaluation/forex/others growth (%)**

** Definition:** See Balance sheet

** Formula:** –

** Forecast: **Plug in growth rate in percentage (%)

** **

**Return on equity (ROE) (%)**

** Definition:** How much net profit that is generated for every 100 in Equity. Return on equity (ROE) measures the profitability of a company. ROE differs from return on assets as the capital structure of the company is considered. For example, increased leverage increases ROE, all else equal. Calculated by the model

** Formula:** Net income/Total shareholders’ equity

** Forecast: **This is a model output based on your forecasted input variables above

**Recurring ROE including forex gain/(loss) (%)**

** Definition:** Uses recurring profit before forex adjustment instead of net profit to calculate ROE

** Formula:** Recurring profit before forex adjustment/Total shareholders’ equity

** Forecast: **This is a model output based on your forecasted input variables above

**Recurring ROE (%)**

** Definition:** Uses recurring profit instead of net profit to calculate ROE

** Formula:** Recurring profit after tax/Total shareholders’equity

** Forecast: **This is a model output based on your forecasted input variables above

**Invested capital**

** Definition:** Invested capital includes total debt, equity & minorities and non-operating cash and investments

** Formula:** Invested capital = total debt + equity & minorities + non-operating cash and investments; Total debt = overdrafts & short-term debt + current portion of long-term debt + lon-term debt minus current portion of long-term debt; Equity & minorities = total shareholders’ equity + minority interest; Non-operating cash and investments = cash and short-term investments + long-term investments;