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E

earnings per share (eps) 
Profit after tax less preference share dividends divided by the number of ordinary shares in issue measures the return per share of earnings available to shareholders.

EBITDA 
Earnings before interest, tax, depreciation, and amortisation.

economic value added (EVAT)
Profit after tax adjusted for distortions in operating performance (such as goodwill, extraordinary losses, and operating leases) less a charge for the amount of capital employed to create that profit (calculated from the adjusted book value of net assets times the company's weighted average cost of capital). (Stern Stewart)

effectiveness 
The utilisation of resources such that the output of the activity achieves the desired result. In other words, efficiency alone is not enough - efficiency in areas from which optimised output is what is required to be effective (to avoid being a 'busy fool').

efficiency 
The achievement of either maximum useful output from the resources devoted to an activity, or the required output from the minimum resource input.

environmental reporting 
A statement included within the annual report and accounts that sets out the environmental policies of the company and an explanation of its environmental management systems and responsibilities. The environmental report may include reporting on the performance of the business on environmental matters in qualitative terms regarding the extent to which it meets national and international standards. It may also include a quantitative report on the performance of the business on environmental matters against targets, together with an assessment of the financial impact.

equity 
The total investment of the shareholders in the company, the total wealth. Equity comprises capital, premiums, and retained earnings.

ergonomics 
The study of the efficiency of persons in their working environment.

euro 
The common currency of the European Union, which came into being on 1 January 1999. Financial transactions and/or financial reporting of member states may now be undertaken in either the functional domestic currencies, or in euros.

ex ante 
Means before the event. An ex ante budget, or standard, is set before a period of activity commences, and is based on the best information available at that time on expected levels of cost, performance, etc.

ex post
Means after the event. An ex post budget, or standard, is set after the end of a period of activity, when it can represent the optimum achievable level of performance in the conditions which were experienced. Thus the budget can be flexed, and the standards can reflect factors such as unanticipated changes in technology and in price levels.

exceptional items 
Material items which derive from events or transactions that fall within the ordinary activities of the reporting entity individually or, if a similar type, in aggregate and which need to be disclosed separately by virtue of their size or incidence if the financial statements are to give a true and fair view (FRS 3).

expected value 
The financial forecast of the outcome of a course of action multiplied by the probability of achieving that outcome. The probability is expressed as a value ranging from zero to 1.

extraordinary items 
Material items possessing a high degree of abnormality that arise from events or transactions that fall outside the ordinary activities of the reporting entity and which are not expected to recur. They do not include exceptional items, nor do they include prior period items merely because they relate to a prior period (FRS 3).