Annual Report 2006
Explanation of some financial concepts and ratios
In calculating financial profitability ratios use is made of the
average of the opening and closing values of balance sheet
items in the year under review.
The financial indicators per ordinary share are calculated on the
basis of the average number of ordinary shares outstanding
(average daily number). In calculating Royal DSM N.V.
shareholders’ equity per ordinary share, however, the number
of shares outstanding at year-end is used.
In calculating the figures per ordinary share and the ‘net profit
as a percentage of average Royal DSM N.V. shareholders’
equity available to holders of ordinary shares’, the amounts
available to the holders of cumulative preference shares are
deducted from the profits and from Royal DSM N.V.
The total of the carrying amount of intangible assets and
property, plant and equipment, inventories, trade receivables
and other receivables, less trade payables and other
This includes all investments in intangible assets and property,
plant and equipment as well as the acquisition of subsidiaries,
associates and securities.
Cash flow is net profit plus depreciation and amortization.
CFROI (Cash Flow Return On Investment)
Cash Flow Return On Investment is the sustainable cash flow
(EBITDA minus related annual tax and minus 1% depreciation
on weighted average historic asset base) divided by weighted
average asset base plus average working capital.
This includes the disposal of intangible assets and property,
plant and equipment as well as the disposal of participating
interests and other securities.
Earnings Before Interest, Tax, Depreciation and Amortization
EBITDA is the sum total of operating profit plus depreciation
Earnings per ordinary share
Net profit attributable to equity holders of Royal DSM N.V.
minus dividend on cumulative pr