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Financial assets :

Sum of net depreciation assets (plus some non-current assets) and working capital. The capital used are the counterpart of the financial assets in the balance sheets.

Share :

A negotiable share representing a fraction of a company’s capital, given to shareholders in exchange for a capital contribution. Shares give its owners certain rights: a share of profits as a dividend, votes in general meetings, the right to information, and bonuses during liquidation.

Shareholder :

The owner of at least one share in a company.

Shareholders :

The full list of a company’s shareholders.

Financial analyst :

A professional working in a bank or brokerage company, a financial analyst produces research in to listed companies for investors. They analyse the company’s environment, its strategy, accounts, and profit outlook. Based on this information, the analyst creates an estimate of the company’s profits for the next three years.

General Meetings :

The shareholder meeting is an annual meeting attended by all shareholders, to approve the accounts and vote on resolutions on the agenda. Decisions are made by majority vote.

Shark repellent provision :

The share of its own capital held by a company. Shares that are part of a shark repellent provision do not have the right to vote and receive no dividends.

Financial Market Authority (FMA) :

The organisation responsible for supervising markets. The body has a general competence to protect savings, monitor the compliance of transactions and the quality of information provided by issuers.

Advice of deal :

A document issued by a broker to their client following a purchase/sale order, which describes the conditions for executing this order.

Net Profit per Share (NPS) :

The Group’s net profit divided by the number of shares that make up its capital.

Need for working capital (NWC) :

The sum needed to finance shares and credit granted by the company to its clients (trade debts), minus the credit granted to the company by its suppliers (supplier debts).


The acronym for the warrant for the subscription and/or acquisition of redeemable shares. The warrant gives investors the option, rather than an obligation, to acquire shares. These shares may be distributed to shareholders during a capital transaction, for example, or purchased later on the secondary market.

Stock Market Capitalization :

The value given to the company by the stock market on a given date. It is equal to the share price multiplied by the number of shares that make up the capital.

Equity (before or after distribution) :

Capital belonging to shareholders. This includes capital subscriptions, the reserve from profits in prior years, and profits from this financial year (before distribution), as well as the share of profits for the financial year put into reserve (after distribution).

Cash Flow (and free Cash Flow) :

Free cash flow is equal to the EBITDA, along with the variation in provisions for risks and expenses, minus the net financial fees paid and taxes paid, adjusted for:


  • Change in working capital required
  • net investments

It is an indicator that can be used to manage the use of resources, and therefore monitor changes to debt.

Turnover :

Turnover is the income (excluding tax) generated by a company with third parties as part of their standard, everyday business. It corresponds to the sum of sales of goods, manufactured products, services, and associated activities.

ISIN Code :

The ISIN (International Securities Identification Number) code is a set of two letters and ten numbers that provides trustworthy identification of an asset’s value and its country of origin.

Dormant partner :

Dormant partners are associates whose liability is limited to the sum of their contribution. They are different from general partners, who are the only ones able to manage the company.

Consolidated financial statements :

Financial statements detailing the financial situation of a group of companies as if they were a single entity. For companies listed in Europe, they must comply with IFRS standards.

Rating :

This sets the market share price at a given time by reconciling supply and demand.

Adjusted share price :

The share price recalculated to take into account operations that changed the amount of capital such as the division of shares or capital increase. The adjustment is used to compare how share prices have changed over time.

Dilution :

Reduction in net profit per share due to the creation of new shares such as when capital is increased, during a merger/acquisition, or a conversion of obligations in to shares.

Dividend :

The share of the company’s net profits distributed to shareholders. For Michelin, a limited stock ownership company, this sum is paid to managers and voted in the General Meeting.

Reference document :

A document containing all legal, financial, and accounting information pertaining to a company for a given financial year. As soon as it is submitted to the FMA, it becomes a public document and can be viewed by anyone at any time.

Right to vote :

The right to vote is attached to shares and enables shareholders to adopt a position in the resolutions presented at the General Meeting.


The operating profit is the profits from operations and investments in the financial year. It displays the increased wealth created by the company’s industrial and sales performance. It is different from the GOS (Gross Operating Surplus) that focuses on the  operating cycle in that the operating profit also takes the investment process into account through  calculated fees (sums for depreciation and provisions). The profits are then divided in to financial fees, corporation tax, dividends, and the reserve profits. The operating profit concept is widely used (especially to calculate financial profitability as it is not affected by a company’s financial structure).


This is an intermediate balance that corresponds to the operating profit before the depreciation deductions of tangible and intangible assets and before any loss of value.

Net borrowing :

Net borrowing, or the net financial borrowing, is the balance of its borrowing, available credit, and financial investments. It represents the company’s credit or debt standing with regard to third parties outwith the operating cycle. This is the balance used to calculate leverage.

Euronext :

Euronext is a European grouping of stock market companies (i.e. companies that work to manage one or more financial markets) created by grouping together the operational businesses of the Paris, Amsterdam, Brussels and, later, the Lisbon stock exchange and the  LIFFEmarket under a single parent company (Euronext NV).

Float :

The company capital available for market exchanges. The higher the float the higher share liquidity.

Gearing :

Net borrowing in relation to equity

Goodwill :

The difference between the cost of acquiring a company and the value of its equity at the time it joined the group.

Governance :

Corporate governance refers to all procedures, regulations, laws, and institutions designed to coordinate how a company is managed, directed, and controlled.

IFRS - International Financial Reporting Standard :

International accounting standards from the IASB (International Accounting Standards Board). Since 1 January 2005, they have been mandatory for all listed companies in Europe (for consolidated financial statements only) in order to facilitate their bookkeeping.

Stock market index :

An instrument used to measure the performance of a market or sector’s values, representing the average (simple or weighted) of shares in the representative sample it makes up.

Operating margin :

Operating profit in relation to net sales excluding taxes.

Obligation :

A negotiable debt security issued by a company or public body with interest redeemable at a fixed maturation date for a predetermined sum.

Shareholder agreement :

A legal document organising the relationships between a company’s different shareholder groups, establishing mechanisms with the primary aim being to provide a strategy and regulate changes to the distribution of capital when shares are transferred.

Liabilities (in relation to assets) :

Liabilities are all of a company’s resources (a resource used for the company). Liabilities are assets with a negative financial value, forming an obligation to a third party in which it is likely or certain that resources will be transferred to this third party without any equivalent expected in return (Article 212.1 of General French Accounting Plan).

Quorum :

The minimum percentage of shares present of represented with the right to vote required so that the General Meeting’s deliberations are valid.

Net profit :

The profit or loss after corporations tax. The Group’s net profit excludes the share of net profit from minority interest.

Operating profit :

The net result before financial results, taxes, and the shareholder share of profits are taken in to account.

Financial results :

Financial results describe the impact that the mode of funding has on profits. From a financial standpoint, only the product and fees directly related to company debt and investment are used by reclassifying other items as operations or one-off actions. As most companies are not financial businesses, in most cases we talk about the net financial charges of a product.

ROCE - Return On Capital Employed :

Operating profit after tax (calculated directly on these profits) in relation to average financial asset. This ratio measures the profitability of shareholder invested capital and loans from banks and other financial partners. ROCE is different from ROA in that it takes taxes into account.

Face value :

The initial value of a share set in the company statutes. The company capital is the nominal value multiplied by the number of shares.

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