Glossary


Letter: C
 
Capital gain Investment sold at a profit. Amount by which an asset’s selling price exceeds its initial purchase price. Not inclusive of dividends (see) accrued. (see Dividends)
 
Capital stock Its amount is established in the company statute. For jointstock companies, the capital stock is expressed as a given number of shares, each of them having a nominal value
 
Capitalization Market value of a listed company equals number of shares/stocks times their price.. Pirelli & C with its 2.5 billion euro market value is among the major medium capitalization companies listed on the Italian Market.
 
Cash flow Indicator on the ability of an organization to be self-financed and/or generating cash. The Operating Free Cash Flow (OpFC = ebitda – capex) is the gross cash generated by the business. Net free Cash Flow is the result of the OpFC net from depreciations, financial charges and interest payables. (see Cash Flow)
 
CdA (Consiglio di Amministrazione - Board of Directors) It consists of members chosen by shareholders and known as Directors. They are responsible for managing the company
 
CAGR - Compound Annual Growth Rate The year-over-year growth rate of an investment over a specified period of time.
The compound annual growth rate is calculated by taking the root of the total percentage growth rate, where n is the number of years in the period being considered:
CAGR= [(Ending value/Beginning Value)^(1/n-1)]-1
CAGR isn't the actual return in reality. It's an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as a way to smooth out the returns.

CAGR is one of those terms best defined by example. Suppose you invested 10,000 Euro in a portfolio on Jan 1, 2005. Let's say by Jan 1, 2006, your portfolio had grown to 13,000 Euro, then 14,000 Euro by 2007, and finally ended up at 19,500 Euro by 2008. Your CAGR would be the ratio of your ending value to beginning value (19,500 / 10,000 = 1.95) raised to the power of 1/3 (since 1/number of years = 1/3), then subtracting 1 from the resulting number:
1.95 raised to 1/3 power = 1.2493
1.2493 - 1 = 0.2493
Another way of writing 0.2493 is 24.93%.
Thus, your CAGR for your three-year investment is equal to 24.93%, representing the smoothed annualized gain you earned over your investment time horizon
 
Common Investment Fund Hedge Fund Financial instrument through which savers’ money is invested into shares/stocks and/or Securities through issuing certificates called “shares”. Securitized when Portfolio is made by Securities only, or Property if made by real-estate. Multi-lever financial instrument (i.e., short selling) to have positive yields under all market conditions...
 
Consensus estimate Expectations/assessments by financial analysts on the economic-financial and assets and liabilities of a listed company. Consensus on Pirelli & C is published on a regular basis on the corporate website. (See Consensus)
 
Consob (National Securities and Exchange Commission) It is the highest inspection and control institution for Stock Exchange markets
 
Corporate
governance
Corporate rules, systems, management and control entities. Pirelli & C was acknowledged by GMI (Governance Metrics International) the best Italian Company for its Governance system. (See Corporate Governance)