AskBorsa
Reading guide

Financial glossary

Every line in the AskBorsa tables is explained here in plain language: what it means, how to read it, and what to watch for. Plus the reporting periods and ratios investors ask about most.

Income statement

Net profit

What is left of revenue after all costs, expenses, interest and tax for the period.

Net profit is the figure most people use to judge a company's performance. It is what gets paid out as dividends or reinvested. A negative number is a net loss for the period. On AskBorsa it is the first row of the summarised statements, shown with its change against the same period a year earlier. For groups with subsidiaries the figure is the group's net profit as published, including the minority share.

Formula:Revenue − cost of sales − expenses − interest − tax
This line appears in every company's summarised statements and in the Rankings

Gross profit

Revenue minus the cost of sales only, before administrative, selling, finance and tax costs.

Gross profit measures how profitable the core activity is: how much of each pound of sales is left before overheads and financing. Its ratio to revenue is the gross margin, and a steady decline usually points to rising input costs or pricing pressure. Banks normally do not report a gross profit line because their business model is different.

Formula:Revenue − cost of sales
This line appears in every company's summarised statements and in the Rankings

Balance sheet

Total assets

Everything the company owns at the balance-sheet date: cash, inventory, receivables, land, buildings, machinery and investments.

Unlike net profit, which is measured over a period, total assets is a balance at one moment, the end of the period. It is used to gauge a company's size and to compute return on assets. For banks, assets are mostly loans to customers and treasury bills and bonds, so a bank's assets are far larger than an industrial company's with the same profit.

Formula:Total assets = total liabilities + shareholders' equity
This line appears in every company's summarised statements and in the Rankings

Total liabilities

Everything the company owes to others: loans, amounts due to suppliers, taxes payable, and customer deposits in the case of banks.

Liabilities are the part of the assets financed by debt rather than by shareholders. Their ratio to total assets or to equity measures leverage: the higher it is, the more the company depends on borrowing and the more sensitive it is to interest rates. For banks, customer deposits are the largest liability, which is normal for their business model.

This line appears in every company's summarised statements and in the Rankings

Shareholders' equity

What remains for shareholders after all liabilities are settled: paid-in capital, reserves and retained earnings.

Also called book value. Equity grows with retained profits and capital increases, and shrinks with losses and dividends. Comparing a company's market value with its equity gives the price-to-book multiple. In consolidated statements the figure includes non-controlling interests, the other shareholders' stake in subsidiaries. Negative equity means accumulated losses have exceeded capital and reserves.

Formula:Total assets − total liabilities
This line appears in every company's summarised statements and in the Rankings

Total liabilities and equity

The sum of the two ways assets are financed. It always equals total assets.

This line is the other side of the balance-sheet equation: every asset is financed either by debt (liabilities) or by shareholders (equity). It is useful as a check that the statements balance, and in some periods it appears instead of total assets when the source does not publish the other line.

Formula:Total liabilities + shareholders' equity = total assets
This line appears in every company's summarised statements and in the Rankings

Cash-flow statement

Operating cash flow

The actual cash the core business generated in the period: receipts from customers minus payments to suppliers, staff and tax.

It differs from net profit because it strips out non-cash items such as depreciation and accounts for changes in inventory, receivables and payables. A company that is profitable on paper but has weak or negative operating cash flow year after year deserves a closer look: it may be selling on credit without collecting, or piling up stock. Operating cash flow above net profit for several years is usually a sign of good earnings quality.

This line appears in every company's summarised statements and in the Rankings

Investing cash flow

Cash spent on buying long-term assets or received from selling them: plants, machinery and investments.

It is usually negative for companies that are expanding, because they spend more on new assets than they sell. A large positive investing flow can mean asset or investment sales, which is worth reading the report to understand. For banks it includes purchases and sales of long-term government securities.

This line appears in every company's summarised statements and in the Rankings

Financing cash flow

Cash exchanged with shareholders and lenders: share issues, borrowing, loan repayments and dividends.

A negative financing flow means the company repaid debt or paid dividends beyond what it borrowed or raised from shareholders, which is common in mature companies. A positive flow means new borrowing or a capital increase, usually accompanying expansion or pressure on liquidity.

This line appears in every company's summarised statements and in the Rankings

Net change in cash

The sum of the three flows, i.e. the difference between the cash balance at the start and end of the period.

It combines operating, investing and financing cash flows in one number. A negative figure is not necessarily a problem: it may follow a large investment or a debt repayment. What matters is where the change comes from. Cash from operations is better than cash from borrowing.

Formula:Operating + investing + financing cash flow
This line appears in every company's summarised statements and in the Rankings

Dividends paid

Cash actually paid to shareholders as dividends during the period, shown under financing activities.

It can differ from the dividend the company declared for a given year, because payment usually happens in the following year after the general assembly approves it. Dividends paid divided by net profit is the payout ratio. A ratio consistently above 100% means the company is paying out of reserves.

This line appears in every company's summarised statements and in the Rankings

Periods and reports

Fiscal year

The period a company prepares its annual accounts for. Most EGX companies use January to December.

Some companies start their fiscal year in July, including several fertiliser, pharmaceutical and state-owned companies, and others in September or April. Two companies can therefore publish annual statements in the same month that cover different periods. On AskBorsa the fiscal-year start month is shown on each company page, and the year label follows the company's own reports.

Annual and quarterly statements

Annual statements are audited and cover the full year. Quarterly statements are reviewed, not audited, and cover three months.

Quarterly figures on AskBorsa are for the quarter alone: the Q3 figure is three months of profit, not nine, and the four quarters add up to the annual figure. Egyptian companies normally publish Q1, Q2 and Q3, while Q4 is derived as the difference between the annual statements and the nine-month figures. Annual statements are the more reliable because they are fully audited and include year-end adjustments.

Consolidated and standalone statements

Consolidated statements present the parent and its subsidiaries as one entity. Standalone statements present the parent alone.

A company with subsidiaries publishes two sets of statements. The consolidated set best reflects the real size of the business because it includes the revenue and assets of every subsidiary, and it shows a non-controlling interest line. The standalone set shows only the parent, with subsidiaries carried as investments. The summarised figures on AskBorsa are the consolidated ones wherever the company publishes them, while the report file linked to a period may be the standalone version if that is the file the source made available, in which case its figures differ from the summary.

Year-on-year growth

The percentage change in a line compared with the same period a year earlier.

Comparing with the same period removes seasonality: Q1 is compared with last year's Q1, not with Q4. When the prior-year figure is negative (a loss) the percentage becomes misleading, so AskBorsa shows it only when the comparison is meaningful and treats a swing from loss to profit as an event rather than a percentage. With high inflation, as in Egypt, nominal growth below the inflation rate is a real decline.

Formula:(current − prior) ÷ |prior|

Common ratios derived from the statements

Return on equity (ROE)

Net profit divided by shareholders' equity: how much the company earns on each pound its shareholders own.

One of the most used ratios for comparing companies within a sector. A high and stable return over several years is better than a high return in a single year. It can be computed directly from the AskBorsa table by dividing annual net profit by equity at the end of the same year. Be careful comparing companies with different leverage: debt raises ROE and raises risk with it.

Formula:Net profit ÷ shareholders' equity

Return on assets (ROA)

Net profit divided by total assets: how efficiently the company turns its assets into profit.

Especially useful for comparing banks, where ROA is naturally low (often between 1% and 3%) because assets are huge. Industrial and service companies run higher. A falling ROA while assets grow means the expansion has not yet translated into profit.

Formula:Net profit ÷ total assets

Liabilities-to-equity ratio

Total liabilities divided by shareholders' equity: a measure of financial leverage.

A ratio of 1 means debt equals shareholders' funds. What counts as reasonable varies enormously by sector: banks operate above 8 because deposits are liabilities, while a technology or food company at 3 would be heavily indebted. What matters most is the trend over the years and the comparison with peers in the same sector.

Formula:Total liabilities ÷ shareholders' equity

EBITDA

Earnings before interest, tax, depreciation and amortisation, used to compare operating performance regardless of financing structure.

This line does not appear in the summarised statements on AskBorsa because it is not an official line under Egyptian accounting standards, though companies often quote it in presentations. It helps compare companies with different asset ages and debt levels, but it ignores real costs: machines wear out and loans carry interest. Operating cash flow is a stricter measure of what a company actually generates.

Formula:Net profit + tax + interest + depreciation and amortisation

Earnings per share (EPS)

Net profit attributable to the parent's shareholders divided by the number of shares.

It appears at the bottom of the income statement in the official report. Dividing the share price by EPS gives the price-to-earnings multiple, the number of years it would take to recover the share price from current earnings. Capital increases and bonus shares change the share count, so compare EPS across years with that in mind.

Formula:Net profit attributable to the parent ÷ number of shares
Apply this to a real company
Open any EGX company and read five years of summarised statements with the source report.
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