Financial Glossary

AMF (Autorité des Marchés Financiers)

The AMF is the product of the fusion of the Commission des Opérations de Bourse (COB), Conseil des Marchés Financiers (CMF) and Conseil de Discipline de la Gestion Financière (CDGF). The AMF is the stock exchange authority which regulates the French financial markets and guarantees that investors in France are informed and protected.

Adjusted EBIT (aEBIT)

Adjusted EBIT corresponds to Earning Before Interests, Tax and Net Result from Equity Method Investments adjusted with: net restructuring expenses, tangible and intangible assets impairment,  capital gains or loss/revaluation  on investments disposals or controls changes on an entity and any other non-recurring items. A non-recurring item is a “one-off”/exceptional item that is not supposed to be reappearing in following years and that is significant.

Annual Financial Statements

The annual financial statements include the balance sheet, income statement and appendices. A public company must publish its Annual Financial Statements within four months of the end of the fiscal year. They must be regular and present an image, which truthfully represents the history, the financial situation and the results of the company.

Annual Report

The annual report is a document of information aimed at shareholders and published by companies whether or not they are quoted on the stock exchange. The annual report must be published 15 days before the annual general meeting. It includes a management report, consolidated and social accounts, a table of results for the last 5 years and auditors' reports.

Balance Sheet

A balance sheet is a snapshot of the company's accounts at the end of fiscal year. It shows the resources of the company (assets) and its debts (liabilities).

BALO (Bulletin des Annonces Légales Obligatoires)

The BALO publishes all obligatory information notices of public companies. In particular, it publishes announcements of financial operations, accounts and notices of Annual General Meetings.

Board of Directors

ALSTOM's Board of Directors is made up of 12 members elected by the shareholders' Ordinary Annual General Meeting. It determines the orientation of the company's activities and proceeds over the controls and checks that it judges appropriate.


A broker is a financial intermediary who intervenes in organised stock markets. He/she is responsible for putting buyers and sellers in contact with each other.

Capacity of Self-Financing

Capacity of self-financing indicates whether or not the Company is able to release liquidity in order to finance operating charges and development. It is equal to the net profit to which you reintegrate all the entries that are not associated with the movements of cash such as depreciation and provisions, appreciation and depreciation of asset disposals.

Capital Employed

ALSTOM defines capital employed as net fixed assets, plus current assets (excluding net amount of securitisation of existing receivables), less provisions for risks and charges and current liabilities.

CLIFF ( Cercle de Liaison des Informations Financiers en France)

French association of those responsible for the financial information of companies which are quoted on the stock exchange.

Closing price

The share price at the end of a period of trading on the Stock Exchange.

Consolidated Accounts

The accounts of the Group which include the accounts of the parent company and its subsidiaries.


Covenants are pre-established financial ratios that ALSTOM must maintain compliance with to respect financing agreements with its lenders.

Deferred Tax

Deferred tax is only stated in the consolidated accounts in addition to payable tax from the individual accounts. It is composed of:

  • corrections of payable tax from the individual accounts for reasons of treatments which conform to rules of consolidation;
  • tax savings or future tax charges which result from a future difference between the fiscal profit and the accounting result on operations. This difference is called 'temporary difference'.


The delisting of a financial instrument is the procedure, which allows the company to be removed from quotation on a reglemented market. The procedure is carried out by the stock exchange (i.e. Euronext Paris in France), which manages the regulated market on which the instrument is quoted, subject to the right of opposition of the market authority (AMF in France).


Dilution can be caused by a change in the financial structure of a company, in particular, following a financial operation, and it usually constitutes a lowering of the profit per share or a reduction of the percentage of capital that a shareholder owns.


A dividend is part of the profit, which is distributed to shareholders.

Earnings per Share

Basic earnings per share are calculated by dividing the annual net income (loss) by the weighted average number of outstanding share during the fiscal year.
Diluted earnings per share are calculated by dividing the annual net income (loss) by the weighted average number of outstanding shares plus the effect of any dilutive instruments.

EBIT (Earnings Before Interest and Taxes)

EBIT (Earnings Before Interest and Taxes) represents the balance between the operating income and the operating expenses. It represents the increase in wealth created by the industrial and commercial activity of the company. It differs from the trading profit because depreciations and provisions are included in the calculation. The EBIT are shared between financial expenses, corporation tax, dividends and earnings put into reserves.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the balance between operating income and operating charges. It differs from EBIT in so far as depreciation and amortization are not taken into account. It is generally assimilated to trading profit.

Economic Debt

ALSTOM defines economic debt as net debt plus cash proceeds from sale of trade receivables. Economic debt does not represent our financial debt as calculated under French GAAP and should not be considered as an indicator of our currently outstanding indebtedness.

Equity Capital

Equity capital represents permanent capital available. It includes shareholders equity, minority interest and reserves.


Euronext is the stock exchange which was formed by the fusion of the Paris, Amsterdam, Brussels and Lisbon stock exchanges. ALSTOM ordinary shares are quoted on the First Market of the Euronext Paris Stock Exchange.

Financial Analyst

A financial analyst analyses all the available information about a company or market sector, for example, accounts, strategy and management methods. The analyst writes a report and makes judgements about the future stock market performance of a company.

Financial Income

ALSTOM's financial income is principally comprised of interest payable on borrowings, interest receivable on funds invested, foreign exchanges gains and losses as well as gains and losses on hedging instruments.
Interest that has been and will be received is recognised as revenue according to the actual yield of the asset. Dividends are accounted for under their approbation date and relevant parts of the subsidiaries concerned.

Free Cash Flow

Free cash flow represents the potential funds available except for shifts in cash flows. ALSTOM defines free cash flow as « net cash flow provided by (used in) operating activities less capital expenditures, net of proceeds from disposals of property, plant and equipment and increase (decrease) in existing receivables considered as a source of funding in our activity ».

Free Float

Free Float is the percentage of capital which is held by investors, obeying the pure financial logic that one buys when the share price seems low and sells when it seems to have risen. It therefore represents the part of the capital which remains available to the public.


The gearing ratio is calculated by dividing net debt by share capital.


Goodwill is the difference between the buying price of a company and the net value of the subsidiary after re-evaluation.


Measures put in place in order to ensure smooth functioning and control of a company. Such measures reinforce the importance of transparency of information.

IFRS (International Financial Reporting Standards)

International Financial Reporting Standards are international standards (formerly IAS – International Accounting Standards) established by the IASB (International Accounting Standards Board). According to European law, European companies must adhere to these standards, which have been set out in order to standardise financial reporting methods.

Institutional Investor

As opposed to individual shareholders, institutional shareholders are large entities such as banks or insurance companies, which aim to collect the savings of their clients and manage them by placing them on financial markets. They have a strong influence on the stock markets.


The ISIN code replaces the SICOVAM code from June 2003 and is composed of 12 characters of which the first two signify the place where the shares are quoted. The codes are used to distinguish the different shares quoted on the stock market.

Market maker

A market maker is a trader who works to maintain the liquidity of the market and the continuity of quotations. In order to do this, they permanently offer a buying and selling price for a certain quantity of shares.

Net Debt

ALSTOM defines net debt as financial debt less short-term investments, cash and cash equivalents.

Net Profit

The net profit is the residual part of the profit after the company has paid what it must to creditors and the State. The net profit is the part of the profit, which can be distributed to the shareholders in the form of dividends or put into the reserves in order to increase the capital of the company.

Nominal/Face Value

The volatility of the value of a share represents the amount of variation in the share price. The most volatile shares are those with the largest variations in value of their share price and they are therefore the most risky investment.


When there is an annual general meeting, a notification must be published in BALO and sent by post to registered shareholders at least 15 days in advance announcing the date of the Annual General Meeting.

Opening Price

The share price at the start of a period of trading on the Stock Exchange.

OTC (Over the Counter Market)

The Over the Counter Market allows companies which cannot or do not want to be quoted on a regulated market to be traded on a stock exchange. This market is not regulated.

PER (Price Earning Ratio)

The Price Earning Ratio is a ratio, which compares the share price to the profit per company share. The PER is a criterion often used by analysts.

«Pink Sheet»

The Pink Sheet is a service, which allows investors to compare the prices of shares traded on the Over the Counter Market in the USA.

Primary Market

The primary market is the issuer market.

Pro Forma Accounts

The object of pro-forma accounts is to present the company's accounts while considering the disposals completed within the fiscal year, as if they were registered in the last fiscal year.

Profit & Loss Account

The profit & loss account, or income statements, states all the operations achieved within the fiscal year. These operations can be recurrent or exceptional, positive or negative in terms of cash flow. Operations with a positive result represent revenue and operations with a negative result represent an expense. The difference between the revenues and expenses is the result of the fiscal year (profit or loss)


A provision represents an obligation of uncertain timing and amount for the Company.

Reference Document

A reference document contains all legal, economic and accounts information concerning a company for a given fiscal year. In practice, it often takes the form of an annual report.

Regulated Market

A regulated market is a market on which financial instruments can be traded according to rules defined by the stock exchange.

Return on Capital Employed

See 'ROCE'

Return on Equity

See 'ROE'


A meeting or « one-on-one » which provides an opportunity for the management to meet investors and to present the results of the fiscal year or a financial operation.

ROCE (Return on Capital Employed)

The ROCE ratio measures the profitability of capital employed. ROCE is calculated by dividing pre-tax income by capital employed (assets and working capital).

ROE (Return on Equity)

The ROE ratio measures the profitability of share capital (including minority interests). ROE is calculated by dividing pre-tax income by share capital (including minority interest).

SEC (US Securities and Exchange Commission)

The SEC (US Securities and Exchange Commission) is an American organisation, which aims to protect investors and maintain the successful functioning of the American stock markets.

Secondary Market

Secondary market is the market on which financial instruments are traded (shares, bonds).


Securitisation is a process, which transforms a credit into a share.

Security Price Index

A security price index measures the performance of a share or bond and it can reflect the general tendency in the evolution of the market or sector of activity.

Share Capital

The share capital is the total of all the capital paid in by shareholders at the time the company was established or after a capital increase.


(See ISIN Code)


The volatility of the value of a share represents the amount of variation in the share price. The most volatile shares are those with the largest variations in value of their share price and they are therefore the most risky investment.

Voting Rights

Voting rights are rights attached to shares, and allow shareholders to vote on the resolutions presented at the Annual General Meeting.

Working Capital

ALSTOM defines the working capital as the current assets less current liabilities and provisions for risks and charges.
Working capital represents the balance between entries and resources of the Company.


The yield of a share is calculated by the comparison between the last dividend paid by the company and the share price. It therefore represents the level of remuneration received by the shareholder. The yield of a bond is measured by the comparison between the coupon and the value of the bond.