200-day line

A moving average. A smoothed line derived from the average of the closing prices of a  stock over the last 200 days. Used in the technical analysis of securities.



A purchase of all or part of a company so as to obtain ownership of its operating resources and/or to control its business.

Ad hoc statement

German companies listed on a stock exchange are required to inform the public without delay of any fact that might materially affect the price of their stock. These communications, known as “ad hoc” statements, must first be sent to the stock exchanges and BaFin (see below), and then be released to the market via communications media with a broad circulation. The intent is to prevent abuse of insider knowledge and to enhance the transparency of the market. Companies may be fined for failing to issue an ad hoc statement.


Acronym for American Depositary Receipt.
Depositary certificate traded on U.S. stock exchanges in place of a foreign share.
A significant benefit ADRs offer U.S. investors is their denomination in U.S. dollars. Dividends are also paid in U.S. dollars. Furthermore, a number of U.S. investors are only allowed to purchase shares of foreign companies listed on a U.S. stock exchange.


Abbreviation for American Depository Share.
ADSs are a U.S. dollar-denominated form of equity ownership in a non-U.S. company. They represent that company's shares and carry the rights attaching to them. An ADR is the physical certificate evidencing ownership of one or more ADSs. The terms ADR and ADS are often used interchangeably.


See depreciation


Analysts (financial analysts) assess financial market information in order to develop forecasts of future stock market developments.

Annual financial statements

The annual financial statements document a company’s financial results for the past fiscal year. In addition to a balance sheet and an income statement, a German corporation listed on a stock exchange must also release information such as a cash flow statement, a segment report, and a statement of changes in equity. The annual financial statements are prepared by the board of management, and are audited by a state-certified independent auditor.

Annual stockholders' meeting

The supreme governance body of a stock corporation. It is a meeting of all stockholders, convened at least once a year by the board of management. The annual stockholders’ meeting decides on the allocation of disposable net income, any changes in capital stock, amendments to the articles of incorporation, and other fundamental matters. It appoints the independent auditors and elects the stockholders’ representatives on the supervisory board. Only the annual stockholders’ meeting can ratify the actions of the board of management and supervisory board. The notice of the annual stockholders’ meeting includes a proposed agenda.

Articles of incorporation

Contractual basis of a stock corporation stating the company name, headquarters, business purpose, amount of capital stock and further basic rules and regulations.

Asset deal

Acquisition of a company by transferring individual assets (and occasionally debts) – rather than shares/equity securities – to the purchaser.

Authorized capital

An amount designated to be converted into shares so as to increase the capital stock of a stock corporation. Authorized capital must be approved at a stockholders’ meeting by voters representing a majority of the total capital stock and by at least three-fourths of the votes cast. The existence of authorized capital allows the Board of management to perform a capital increase within five years of the authorization's approval.



The “Bundesanstalt für Finanzdienstleistungsaufsicht,” Germany’s supervisory authority for financial services. It has headquarters in both Bonn and Frankfurt, and was formed by combining the former separate supervisory authorities for the lending, securities and insurance industries. Its mission is to safeguard the functionality, stability and integrity of the entire German financial system. It also has the jobs of protecting customers and investors and enforcing standards of conduct that will maintain confidence in the financial markets (market supervision).

Balance sheet

A balance sheet is a complete breakdown of a company’s assets and liabilities as of a given date, and serves as a measurement of the company’s ability to perform. It lines up the company’s assets, on one side, against its equity and liabilities, on the other. The balance sheet is included in the annual report, along with other statements like the income statement and the cash flow statement.

Basis points

Unit for measuring interest rates. 100 basis points correspond to one percentage point.

Bear market

A steep general decline in stock prices, usually over a longer period. Opposite of a bull market.

Bearer share

Transferable share certificate that does not specify the owner of the share. The bearer of the share is entitled to the rights and obligations stated on the share certificate. Bearer shares are the primary form of shares in Germany.
Antonym: Registered share


In business, a benchmark is a standard against which to evaluate success. Benchmarking is a method and principle of watching and learning from the best in the field.

Blue chip

A stock-market term for the stocks of large corporations with especially solid asset structures and earnings. The term originally comes from poker – blue poker chips have the highest value.

Board of management

Also known as managing board or executive board. One of the three governance bodies of a German stock corporation. Its main duties are the day to day management and representation of the company. A board of management may have one or more members, all of whom are appointed by the supervisory board. The supervisory board may appoint one member to chair the board of management. The chairman of the board of management holds a position similar to that of a chief executive officer in the United States.


A debt instrument that entitles the owner to receive repayment of the bond’s par value plus interest. Bonds may be issued by governments, banks or companies, and are sold through banks. They enable the bond’s issuer to obtain long-term financing by borrowing. The total amount of a bond issue may be divided into segments or “tranches.” The most important features of a bond are its maturity (the date when the issuer will repay the principal), its interest rate, and how its interest is paid.


Abbreviation for Brazil, Russia, India, China. These emerging economies are grouped together in light of the special importance attributed to them based on their growth potential.

Bull market

A strong general rise in stock prices, usually over a longer period. Opposite of a bear market.



Abbreviation for compound annual growth rate

Call option

The right to purchase shares at a previously set amount (strike price) within a certain period or at a certain time.

Capital expenditure

A long-term investment in operations to expand or improve a company’s production infrastructure. Net capital expenditures increase the company’s portfolio of capital equipment. Replacement expenditures provide replacements for goods consumed in the production process. Gross capital expenditures are the total of net and replacement expenditures.

Capital gains tax

In Germany, capital gains tax (“Kapitalertragsteuer”) is withheld from dividends and interest income. All investment income earned in Germany, and some investment income earned abroad, is subject to this tax. Basically the recipient of the investment income is liable for this tax, but it is withheld by the payer of the respective investment income or by a German bank on the taxpayer’s behalf, and is forwarded to the tax office.

Capital increase

A way to increase a company’s equity. A distinction can be made here between an effective capital increase, in which “fresh” capital is provided to the company from external sources, and a nominal capital increase from corporate funds.

Capital invested

Capital invested comprises the assets on which the company must obtain a return by generating an appropriate cash inflow; in some cases the cost of ultimately reproducing the assets must be earned in addition.

Capital reserves

The paid-in surplus from the issuance of shares, i.e. the amount by which capital contributions exceed the nominal value of the capital stock.

Capital stock

The registered capital of a stock corporation. Numerically, it corresponds to the par value of all outstanding shares of stock. In the Bayer AG balance sheet, it is a component of stockholders’ equity. The capital stock of Bayer AG, amounting to Euro 2,116,986,388.48, is divided into 826,947,808 no-par registered shares.

Cash dividend

The portion of the dividend that is actually paid out to stockholders (after deducting corporate income tax) is called the cash dividend.

Cash flow

Key indicator for assessing a company’s financial strength; in addition to gross cash flow, the statement of cash flows also reports the cash flow from operating activities (net cash flow), which shows the amount of funds available from operating activities for financing investments, repaying debts or distributing dividends. The cash flows from investing and financing activities are also reported.

Cash flow statement

A cash flow statement shows a company’s cash disbursements and receipts, together with the net cash outflow or inflow, for a given accounting period (see cash flow).

Cash value added (CVA)

This is the difference between the gross cash flow and gross cash flow hurdle. It is therefore the amount by which the gross cash flow exceeds the return and reproduction requirements. If CVA is positive, the investors’ return and reproduction requirements have been satisfied and value has been created for the company.


Since 1993, Deutsche Börse AG has been publishing the Composite Dax (CDAX), which contains all of the stocks listed on the General or Prime Standard segment of the Frankfurt Stock Exchange. The CDAX is compiled as both a price index and total return index.

Certificated securities

Physical, printed securities.


CFROI - Cash flow return on investment. The CFROI is the difference between the gross cash flow in the reporting period and the cost of reproducing depletable assets, divided by the capital invested. The CFROI is thus a measure of the return on capital employed in the reporting period.

Chart analysis

Method of analyzing and forecasting prices and interest rates in the financial markets on the basis of historical data.

Commercial paper program

Commercial paper (CP) issued under Bayer’s program is a short-term, unsecured debt instrument normally issued at a discount and redeemed at nominal value. It is a flexible way of obtaining short-term funding on the capital market. The commercial paper program allows the company to issue commercial paper on both the U.S. and European markets.

Common stock

In contrast to preferred stock, common stock always carries voting rights.

Comprehensive Instruments

Comprehensive instruments are used to simplify the safekeeping and administration of securities. A multitude of individual instruments securitized in individual certificates is being pooled in a comprehensive instrument and excludes the delivery of individual papers.

Conditional capital

An amount designated to be converted into shares so as to increase the capital stock of a stock corporation. Conditional capital must be approved at a stockholders’ meeting by voters representing a majority of the total capital stock and by at least three-fourths of the votes cast. Conditional capital usually arises in connection with convertible bonds and warrant bonds or a stock option program and results in an increase in the capital stock only to the extent that conversion or subscription rights are exercised.


The “consensus” is often considered equivalent to the “market’s expectations.” It is calculated as the average of analysts’ estimates for certain key figures of a company, such as its operating result or earnings per share (EPS).


(1) In the stock market, consolidation is a phase of stabilization in trading prices following phases of substantial fluctuations or jumps.
(2) In an industry, consolidation means a reduction in the number of companies, owing to either takeovers by competitors or bankruptcy.
(3) In financial reporting, consolidation means the elimination of sales revenues, income and expenses, and gains and losses arising from transactions among
the individual companies in a group (consisting of a parent company and its subsidiaries), along with the receivables and liabilities existing between them, so as to present the results of the group as if it were a single entity (consolidated financial statements).

Continuing operations

Revenue and earnings reporting for continuing operations pertains only to business operations that are expected to remain in the company’s portfolio for the foreseeable future; opposite of discontinued operations.

Convertible bond

A bond that can or must be converted into company stock at a pre-determined ratio. Conversion rights, unlike warrants, cannot be traded separately from the bond.

Core earnings per share (core EPS)

Earnings per share, plus / minus amortization and impairment losses / impairment loss reversals of intangible assets and impairment losses / impairment loss reversals on property, plant and equipment, plus special charges, minus special gains (other than amortization and impairment losses / impairment loss reversals), plus / minus the related tax effects and the share of the adjustments attributable to noncontrolling interest; this indicator facilitates the comparability of performance over time. It is not defined in the International Financial Reporting Standards.

Corporate compliance

Corporate compliance comprises the observance of statutory and company regulations on lawful and responsible conduct.

Corporate Governance

Corporate governance comprises the long-term management and oversight of the company in accordance with the principles of responsibility and transparency. The German Corporate Governance Code sets out basic principles for the management and oversight of listed companies.

Cost of capital

The yield that a company must generate in order to meet investors' expectations regarding the return on their capital. It is possible to determine the cost of equity
and the cost of debt and then to calculate the weighted average cost of capital (WACC).


Abbreviation for currency and portfolio adjusted

Credit default swaps (CDS)

Credit default swaps are tradable insurance contracts used to hedge against the default of a borrower.

Credit rating

An assessment of a debtor’s credit standing by rating agencies on the basis of such criteria as total debt, country risk, etc. Of the leading international agencies, the ratings issued by Standard & Poors range from AAA (top rating) to D (debtor in default); Moodys ratings range from Aaa to C. Ratings help investors evaluate the credit risk inherent in fixed-income securities.

Currency risk

The potential decline in the value of foreign-currency bank deposits, receivables and securities due to exchange rate fluctuations.

Cusip no.

Securities identification number in the United States.


See cash value added (CVA)



This index, developed in 1988 and encompassing Germany’s 40 largest-volume and most actively traded stocks, is the leading index of the German stock exchange company “Deutsche Börse.” A company’s stock is weighted according to the free float capital stock listed on the exchange. In addition to the DAX®, which also includes Bayer AG, there are a number of other German indexes, such as the MDAX® for companies whose order-book trading volume and market capitalization is less than for companies listed in the DAX®, and the TecDAX® for technology firms.

Delta cash value added (Delta CVA)

Delta CVA is the difference between the CVAs of two consecutive periods. A positive delta CVA shows that a unit has created more value or destroyed less value in the second period than in the first.


Synonym: custody account. Set up by credit institutions to administer securities for their customers. Every customer can deposit securities individually (under special wrapper) or in a collective security deposit bank. The latter option is common practice and more affordable.


A way of reflecting, in a company’s balance sheet, the decline in the value of an asset over a specific period of time due to use. In general, “depreciation” is the term used for property, plant and equipment; “amortization” is used for intangible assets. Amongst others there are two principal methods. With straight-line depreciation or amortization, the asset’s cost of acquisition or construction is spread uniformly over its anticipated useful life. With the declining-balance method, the carrying amount of an asset is reduced by larger increments at the beginning of the depreciation or amortization period, and by smaller increments later on.

Directors' Dealings

The "Viertes Finanzmarktförderungsgesetz" became effective as of July 1, 2002. With the keyword "Directors' Dealings" the new notification and publication guidelines (§15a "Wertpapierhandelsgesetz") require an immediate publication of transactions in excess of Euro 25,000 involving securities of the own company undertaken by members of the board and members of the supervisory committee and their spouses, registered partners and first-grade relatives.

Disclosure obligation

Requirement to publish business-related data, which can vary depending on the company’s legal form and its size. Stock corporations are generally required to publish (consolidated) annual financial statements along with a (Group) management report. Further capital market obligations also exist, such as ad-hoc reporting and the disclosure of directors’ dealings.

Discontinued operations

Business operations already divested or earmarked for divestiture in the near future; opposite of continuing operations.


Expanding a company's range of products and services to embrace new areas that are usually related to existing activities.

Divestment, divestiture

Sale of an asset. The opposite of a capital expenditure or acquisition.


The dividend is the portion of the profits paid out for each share of a stock corporation’s stock. The annual stockholders’ meeting decides on the amount of the dividend and when and how it will be paid.

Dow Jones Index

The Dow Jones Industrial Index (DJII), also known as the Dow Jones Industrial Average, is the best-known index on the New York Stock Exchange (NYSE). It is similar to the German DAX index in that it reflects the development of stocks of high importance to the U.S. economy. The DJII has been calculated since 1897 by the Dow Jones & Co. publishing firm. The stocks are weighted according to their absolute prices.


Earnings per share

Earnings per share - EPS is calculated by dividing Group net income by the weighted ­average number of shares as defined in IAS 33.


EBIT - Earnings before interest and taxes. Income after income taxes, plus income taxes, plus financial result; EBIT is not defined in the International Financial Reporting Standards.

EBIT before special items

EBIT plus special charges, minus special gains; this indicator is not defined in the International Financial Reporting Standards.


EBITDA - Earnings before interest, taxes, depreciation and amortization. EBIT plus the amortization of intangible assets and the depreciation of property, plant and equipment, plus impairment losses and minus impairment loss reversals, recognized in profit or loss during the reporting period; this indicator is not defined in the International Financial Reporting Standards.

EBITDA before special items

EBITDA plus special charges, minus special gains; this indicator is not defined in the International Financial Reporting Standards.

EBITDA margin before special items

The EBITDA margin before special items is calculated by dividing EBITDA before special items by sales. This indicator is not defined in the International Financial Reporting Standards.

Electronic trading

Forwarding orders for the sale or purchase of securities through a central computer network. Whereas, in traditional trading, brokers are responsible for coordinating supply and demand, in electronic trading this task is performed by a central computer.

Emerging markets

Collective term for the (securities) markets of the young, developing economies of Latin America, Asia and Africa.

Employee stock

Stock issued to a company’s employees, usually on preferred terms. The goal is to give the employees an individual, direct stake in the company’s success, and also in its business risks.

EMTN and multi-currency EMTN program

The multi-currency European Medium Term Notes (EMTN) program is a documentation platform that enables Bayer to raise capital by quickly issuing debt on the global capital market. Maturities, currencies and conditions can be very flexibly designed.


Earnings per share (see above).


In contrast to liabilities – the other main item on the same side of the statement of financial position – equity is a combination of the funds raised by a company’s owners to finance it, and generated profits retained by the company. Equity – unlike debt capital – is generally available to the company for an unlimited period.

Euro Stoxx 50

Stock index intended to reflect developments across industry sectors in the countries of the European Monetary Union. The index contains 50 blue-chip stocks from 14 countries and is the basis for other Euro Stoxx 50 sub-indices. It is weighted on the basis of the component stocks’ free-float market capitalization, subject to a maximum weighting of 10%.

Exchange-traded fund (ETF)

An investment fund, usually passively managed, that is traded on the stock exchange. Capital is invested in proportion to the composition of an index rather than on the basis of securities analyses, resulting in notably lower administration costs.

Exceptional items

Non-recurring items of an unusual nature.


Fiscal year

The period for which a company’s annual financial statements must be prepared. A fiscal year can never be more than twelve months.

Floor trading

A term for securities trading on an actual trading “floor” of a stock exchange building where the brokers are present in person, in contrast to computer trading.

Foreign exchange

Claims for payments in foreign currencies traded on foreign stock exchanges, usually in the form of assets held in foreign banks or bills of exchange or checks payable abroad; banknotes and coins denominated in foreign currencies are not considered to be foreign exchange.

Forward contract

A forward contract, like a futures contract, allows the holder to buy or sell a specific type of asset at a specific time at a given price. Unlike a futures contract, however, a forward contract is not traded on the stock exchange.

Free float

The percentage of a corporation’s stock that is not held by large, long-term stockholders.

FTSE 100 Index

The most important of the London Stock Exchange's share indexes. It includes the U.K.'s principal financial and industrial stocks, weighted according to their market capitalization.

Futures contract

A futures contract is an exchange-traded contract in which the base value, quantity and quality, delivery date and price of the asset to be provided in the future are determined at the signing of the contract. Unlike a warrant, a futures contract certifies not a right but a future obligation.

Fx & p adj. Abbreviation for currency- and portfolio-adjusted


German Stock Corporation Act

The Stock Corporation Act specifies the legal basis for corporations with share-based ownership structures. In Germany, these may be either a stock corporation (German: Aktiengesellschaft - AG) or a partnership limited by shares (German: Kommanditgesellschaft auf Aktien - KGaA).

Gross cash flow

Income after income taxes, plus income taxes, plus financial result, minus income taxes paid or accrued, plus depreciation, amortization and impairment losses, minus impairment loss reversals, plus / minus changes in pension provisions, minus gains / plus losses on retirements of noncurrent assets, minus gains from the remeasurement of already held assets in step acquisitions; the change in pension provisions includes the elimination of noncash components of EBIT. It also contains benefit payments during the year. This indicator is not defined in the International Financial Reporting Standards.

Gross cash flow hurdle

The GCF hurdle is the gross cash flow that needs to be generated to satisfy investors’ return and reproduction requirements.

Group, corporate group

A grouping of legally independent enterprises by way of intermeshing financial ownership (equity interests) to form a single economic unit under a single management.


Holding company

A holding company is an “umbrella” company that manages or administers a number of other companies in which it holds interests. The companies it manages are still legally independent, but as a rule a holding company has a controlling influence in all strategic issues and is responsible for such matters as the efficient management of the entire corporate group. A holding company itself does not sell goods or services.

Hybrid bond

A hybrid bond is a corporate bond with equity-equivalent properties, usually with either no maturity date or a very long maturity. Due to its subordination, it has a lower likelihood of repayment than a normal bond in the event of issuer bankruptcy.



The International Accounting Standards, adopted by the International Accounting Standards Board (IASB), an independent, privately financed committee founded in London in 1973. International Accounting Standards remain in effect under IFRS (International Financial Reporting Standards), whose application has been mandatory in Europe since 2005. Bayer AG has been preparing its consolidated financial statements according to IAS and IFRS respectively since 1994.


Abbreviation for International Accounting Standards Board. The IASB is the publisher of the International Financial Reporting Standards (IFRS).


International Financial Reporting Standards: since 2005, the basis for preparing the consolidated financial statements of all European companies listed on a stock exchange. The objective of the underlying E.U. Regulation was to achieve improved transparency and a better comparability of financial reporting in the EU.


Impairments are non-scheduled, downward valuation adjustments made to reflect unforeseen declines in the value of assets. Depreciation and amortization, on the other hand, are scheduled adjustments.

Impairment loss

An expense that reduces the carrying amount of an asset to a lower fair value beyond any scheduled amortization or depreciation.

Income before/after taxes

Reported profits for an accounting period before or after the deduction of income taxes. Income before taxes offers greater comparability with the results of previous years and with those of other companies.

Income statement

The income statement compares expenses and income for a given period, usually a quarter or a fiscal year. If total income exceeds total expenses, the company has earned a profit. If expenses exceed income, the company shows a loss.


A term for people who have special (“inside”) information about a business event, for example because of their professional position. Using that information for one’s own advantage in securities transactions is illegal.

Intangible assets

Non-physical assets that are recognized in the statement of financial position. Includes items such as acquired goodwill, patents, technologies and trademarks.


Interest is the compensation a lender requires for temporarily providing capital to a borrower. The rate of interest charged depends on a number of factors, such as the yield curve and the borrower's credit rating.

Intraday trading

The buying and selling of a position (currencies, securities etc. ) within one day. Intraday trading is mainly done by professional investors as a way of quickly reacting to changes in the values of securities during the trading day.


Making capital available on a long-term basis to maintain, expand and improve the economic means of production. Net investment is the addition to existing assets. Reinvestment is the replacement of assets depleted by the production process. Gross investment is the total of net investment and reinvestment.

Investment fund

Investors' assets pooled by an investment management company.

Investment management company

Also known as investment companies or investment trusts, such entities invest the money provided to them by investors according to set principles and goals.


An individual or institution that commits capital to the market with the expectation of return. A distinction is often made between private investors, who invest as individuals, and institutional investors. Strategic and financial investors are also differentiated according to their respective investment goals.

Investor Relations

Investor relations (IR) is the deliberate, strategic fostering of the relationship between a company and the individual members of the financial community. The concept comprises all measures and decisions aimed at maintaining productive relations with existing stockholders and attracting new potential equity providers. They center on a comprehensive, consistent and timely exchange of information between the company and the financial markets. Important investor relations tools include investor conferences, corporate presentations to analysts and investors in the world's major financial centers ("road shows"), presentations on specialist topics or R&D, visits to the company by investors, one-on-one discussions with them and an IR website customized to the needs of the financial community.


Short for the U.S. term "initial public offering", a corporation's first offering of stock to the public.


Abbreviation for: "International securities identification number". Shares, bonds, investment certificates and option bonds listed on German stock exchanges are identified via a 6-digit international securities identification number (ISIN). Bayer's ISIN is DE000BAY0017


The release of new securities, especially stocks and bonds.

Issue price

Price at which shares are issued by stock corporations within the scope of a capital increase or IPO.


Joint venture

An entity founded by two or more legally independent companies for the purpose of carrying out projects together. In most cases, each of the parties to a joint
venture makes an equal capital contribution.


Letter of intent

A nonbinding declaration of intention between a buyer and a seller. A letter of intent confirms that both sides are in negotiations to sign a contract. A letter of intent will often form the basis for that contract, but does not in itself establish any legal entitlements.


Liabilities are obligations to third parties that represent a financial charge. In contrast to provisions, the future payment of liabilities – in terms of their existence, amount and timing – is assured. Liabilities comprise current liabilities such as those to suppliers, and noncurrent liabilities such as bonds.

Life sciences

Field of activities comprising particularly health care and agriculture. At Bayer we develop new molecules for use in innovative products and solutions to improve the health of humans, animals and plants.


(1) A company’s ability to pay its debts (bills, payments of principal, etc.) on time.
(2) In the case of securities, liquidity depends on the number of units of a security currently in circulation, and on the number of market participants who are willing to buy or sell such paper. If a security is liquid, supply and demand are great enough that a transaction – the purchase and sale of the security – can be arranged at any time.


The quoting of prices for a corporate security on a stock exchange. To be listed, a company must meet certain stock market segment specific accounting, capitalization and disclosure requirements e.g. ad hoc statements. The stock exchange’s admissions board decides whether a company can be listed for trading, upon application from a bank and after examining a “listing prospectus.”


M & A

Abbreviation for mergers and acquisitions.

M & S

Abbreviation for marketing and sales.


A term for the difference between the cost and the market price of a commodity or service. “Margin” may also mean the difference between debit and credit interest. In the market practice called “arbitrage,” margin is the difference in price between two different trading forums.

Market capitalization

The market value of a company listed on a stock exchange. Market capitalization is calculated by multiplying the number of shares of a company’s stock times the stock’s current trading price.

Market quotation

Share price officially quoted on the stock exchange, determined by supply and demand and expressed per share unit. The stock market quotation depends, besides national economic factors, on share price determinants like a stock corporation's earnings situation and future perspectives.


Moody's is one of the two best-known and most important rating agencies; the other is Standard & Poors.

MSCI World Index

A stock index published each trading day by the U.S. investment house Morgan Stanley Capital International. It measures the global development of the stock market. The base date of the index is January 1, 1970. It includes round about 1,600 companies in more than 20 countries.



Short for National Association of Securities Dealers´ Automated Quotations system. The NASDAQ is an electronic price information and trading system for stocks, especially of young companies, outside of the NYSE. Operated by the National Association of Securities Dealers, it has been steadily expanding since 1980.

Net cash flow

The net cash flow is the cash flow from operating activities as defined in IAS 7.

Net financial debt

Net financial debt is generally calculated by comparing debt against credit balances. At Bayer it is calculated as the total of all financial debt, less cash, cash equivalents, current financial assets and receivables from financial derivative transactions (interest-rate and foreign exchange hedges).

Net income (net loss)

Net income or loss is a corporation’s profit or loss after taxes and after minority stockholders’ interests. It is reported in the income statement.

No-par stock

Each share of a no-par stock represent a certain proportion (e.g. 1/1000) of a company's capital stock without having an actual nominal or "par" value. No-par stocks are very common in the United States, the United Kingdom and Canada. See Stock types.

Non-operating result

Synonym: Financial result. The non-operating result comprises items such as net interest expense, income from investments in affiliated companies and other financial income and expenses. It is shown separately in the income statement below the operating result.


The abbreviation for the New York Stock Exchange, often referred to indirectly as Wall Street or the “Big Board.”



The right (not the obligation) to buy or sell stock within a certain period or on a certain date for a price agreed upon in advance (the “strike” price). The option has a notional value if the strike price is lower than the stock’s going trading price. If the going trading price is below the strike price, the option has no value.


Securities or investment funds that perform better than the market average are said to “outperform” the market.

Over the counter (OTC)

At Bayer, OTC (over-the-counter) medicines are those obtainable without a prescription. In finance, OTC represents trade between financial market participants outside of an organized exchange. OTC transactions are nevertheless subject to securities trading laws.


Pension fund

An institution with legal capacity that manages an occupational pension plan for one or more employers funded by members' contributions.


(1) The movements of a security’s value. Performance is assessed on the basis of price changes, dividend payments and preemptive (subscription) rights in the case of capital increases. It is stated as a percentage of a base value on a certain date.
(2) A company’s profitability or success potential.


A company’s pipeline comprises all products currently under development or awaiting market launch.


In a financial context, a portfolio is a general term for the body of assets owned. In addition to securities, a portfolio may also include properties and real estate, for example. The aim of portfolio management is generally to diversify the investment risk. This is commonly achieved by investing in different asset classes. The portfolio of an investment fund is the composition of its securities account or the combined total of its investment instruments (stocks, bonds, derivatives etc.).

Preemptive right

A stockholder’s right to purchase new stock, proportionally to existing shareholdings, when the company increases its capital, so that the stockholder’s relative stake in the capital stock remains the same.

Preferred stock

Stock on which higher dividends are paid than on common stock but which does not carry voting rights.


When securities are issued, the premium is the difference between the issue price and nominal amount. In the case of new stock issues, the premium is recognized in equity in the statement of financial position under the item "capital reserves."

Price/cash flow ratio

The price/cash flow ratio is the ratio of the share price to gross cash flow per share. It shows how long it would take for the company’s cash flow to cover the share price.

Price/EPS ratio

This is the ratio of the current share price to earnings per share (EPS). A high price/EPS ratio indicates that the market assigns a high value to the stock in the expectation of future earnings growth.

Prime Standard

Segment of the Frankfurt Stock Exchange with the highest transparency standards. Admission to the Prime Standard segment is a requirement for inclusion in the DAX®-Index, for example.

Property, plant and equipment

The term for the physical assets of a company that are used on a continuing basis, including land, buildings, technical equipment and machinery, fixtures and furnishings, and so forth.


Provisions – sometimes known also as allowances or accruals – are recorded for liabilities, whose existence, amounts or due dates are uncertain. An accounting item is formed for these potential amounts so that future expenditures can be allocated to the periods when they were actually incurred from an economic perspective. Provisions are established for such charges as taxes and pensions.

Public relations (PR)

The provision of information by a company to the general public about the company, its markets, business trends etc. in order to maintain public confidence.

Purchase price allocation (PPA)

The PPA refers to the process used in accounting for a corporate acquisition (business combination) whereby the components of the purchase price for either the shares (share deal) or for the assets and liabilities (asset deal) of the acquired entity are allocated among the acquired assets and assumed liabilities.

Put option

The right to sell shares at a previously set amount (strike price) within a certain period or at a certain time.


Quarterly report

An interim financial report issued by a corporation for each quarter of a year.


R & D

Abbreviation for Research & Development. Activities connected with developing new products and services.


A notable increase in the market price(s) of a stock or stocks.

Real-time quotes

Stock prices that are immediately displayed and continually updated. Some providers charge a fee for access to real-time quotes.

Registered share

Shares dedicated to a certain person that is registered in the company's registrar.


Equity above and beyond a company’s nominal liable capital. German law distinguishes between capital reserves (capital contributed to the company from outside) and retained earnings (reserves built up from earnings the company generates itself).

Retained earnings

Net profits kept within a business after dividends have been paid.


The yield on capital employed, in percent. There are at least two ways of calculating returns:
(1) Dividend yield = ratio of dividend to the trading price of the stock;
(2) Return on sales = ratio of a company’s profits to sales revenues.

Return on capital employed

Acronym: ROCE. This figure measures the return on capital employed in percent. There are two ways of calculating returns:
a) dividend yield = ratio of dividend + tax credit to share purchase price, and
b) return on investment (ROI) = ratio of dividend + tax credit + share price fluctuations + subscription rights to share purchase price.

Return on equity

Acronym: ROE. Ratio of earnings (net income excluding minority interests) to net asset value. The ROE indicates a company's earnings situation and is comparable to interest on a financial investment.

Return on sales, operating margin

The ratio of a company's profits - either before or after taxes - to its sales volume for the same period, expressed as a percentage.


Acronym: REX-P. Index that mirrors the development of the German government bond market.

ROCE Abbreviation for return on capital employed. The percentage return on the capital employed is one way to measure a company's overall profitability.


S&P 500

This index, developed in 1957 by Standard & Poor’s Company, comprises 500 U.S. stocks from 10 different industries. In contrast to the Dow Jones Industrial Index, the S&P 500 is weighted according to the market capitalization of the component companies.

Safe Harbour

In the context of the publication of forward-looking information and projections, U.S. securities laws provide a "safe harbor" or "disclaimer" shielding companies from liability for forward-looking statements in some cases. Generally, a forward-looking statement will not give rise to liability if either

  • the statement is identified as a forward-looking statement and accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking-statement; or

  • the complaining party cannot prove that the author of the statement had actual knowledge that the forward-looking statement was false or misleading.


Abbreviation for the U.S. Securities and Exchange Commission, the supervisory authority for securities trading in the United States.


A security is a certificate that represents an ownership right. The ownership right cannot be asserted without the security. Stocks, notes, mortgage bonds, corporate and government bonds, and investment certificates are all examples of securities.

Securities prospectus

A written summary of information about a particular security and the risks associated with it. Companies are required to publish a prospectus prior to a stock exchange listing or certain types of capital increase.


A unit of stock, which is the equity ownership in a corporation. The bearers or owners of shares of stock - the shareholders or stockholders - are not creditors of the corporation but co-owners of it. They have certain rights, such as voting rights at the stockholders' meeting and subscription rights to new stock. They have no legal entitlement to a dividend, but if a dividend is declared it must be distributed among them in proportion to the number of shares held.

Share deal

The acquisition of a company by purchasing a majority of the shares.

Share price/ Stock Price/ Trade Price

The price of a stock on a stock exchange, determined as a function of supply and demand.


A person owning shares in a stock corporation.

Shareholder value

A management concept that aims to maximize benefits to a company’s stockholders. The emphasis is on increasing enterprise value or the value of the stock.

Special item

One-time items of income or expense.

Spot rate

Prices fixed for securities that only have one price quoted per trading day (single price quotation) or for continuously quoted securities that do not meet the set minimum trading quantity.


Transfer of the shares held by minority stockholders in a stock corporation to the majority stockholder in return for a compensation payment. In Germany, a majority stockholder with an interest of 95 percent can request a squeeze-out. When a stock corporation is merged with a parent stock corporation, a squeeze-out can take place if the majority interest is 90 percent or greater.

Stakeholder value

A management approach that aims to generate value for everyone affected by a company’s policies – including the employees and society in general. The stakeholder value approach acknowledges the concern that if management adopts a one-sided focus on building value for stockholders only (shareholder value), it may in fact undermine the real economic basis for success. For example, a short-term focus on the stock’s trading price might jeopardize employees’ long-term confidence in management. However, stockholder value and stakeholder value do not necessarily conflict with one another.

Standard & Poors

Standard & Poor's is one of the two best-known and most important rating agencies; the other is Moody´s.

Statement of financial position

The statement of financial position – still sometimes known as the balance sheet – is a complete breakdown of a company’s assets, equity and liabilities as of a given date, and serves as a measurement of the company’s performance. It distinguishes between the allocation of funds (assets) and the source of funds (equity and liabilities) and thereby provides an overview of the company’s financing structure. The statement of financial position forms part of a company’s annual financial statements along with other schedules such as the income statement and the cash flow statement.


In Germany, two types of companies issue stock: the stock corporation, or “Aktiengesellschaft” (abbreviated AG) and the “partnership limited by shares,” or “Kommanditgesellschaft auf Aktien” (abbreviated KGaA). Stock is divided into individual units called “shares.” The bearer or owner of a share of stock (called a shareholder or stockholder) owns a portion of the company’s share capital or “capital stock,” defined either as a percentage of that capital (a “theoretical” or “notional” value) or as a specific amount stated on the face of the stock certificate (a “par” value). Stockholders have a number of fundamental rights, including the right to participate and vote at stockholders’ meetings, the right to receive a portion of the company’s profits (a “dividend”), and the first right of refusal (known as a preemptive right or subscription right) if the company issues new stock.

Stock analysis

The study of share performance for the purpose of making long- or short-term investments. The analyst applies specific criteria in an attempt to predict future performance of the stock price on the basis of past and present data. While fundamental analysis focuses on the financial data relating to the company itself and the markets in which it operates, technical analysis is concerned mainly with trends in the stock price and turnover. The principal stages in stock analysis are generally considered to be:
1. the actual analysis of the relevant data
2. the prediction of future profitability
3. the valuation of the stock

Stock corporation

A company whose stock is divided up into individual shares. Stock corporations often have a great many stockholders, many of whom may hold only small stakes. Such companies are said to be “widely held”. Each stockholder’s liability is limited to the value of the stock he or she owns. If a stock corporation is listed on a stock exchange, its stockholders can sell their shares on the exchange whenever they like, by way of a bank. German stock corporations have three principal governance bodies: the board of management, the supervisory board, and the annual stockholders’ meeting. To protect stockholders’ interests, German stock corporations must meet certain disclosure requirements. For example, they must publish their financial statements each year and announce business events that may have a material effect on the price of their stock.

Stock index

Stock indices measure the price or value development of multiple stocks. The stocks included in each index are weighted according to certain criteria, such as their market capitalization. Indices can either be price indices (such as the FAZ index), which only takes the stock prices themselves into account, or total return indices (such as the DAX, which also include dividends and subscription rights from capital increases in its calculations. A total return index therefore provides insight on the overall value development of the included stocks. The development of the individual stocks is often compared to the index as a whole when making performance comparisons.

Stock market

The market for securities, currencies, commodities and derivatives. The market is embodied in individual institutions known as exchanges. The world’s largest stock exchange is the New York Stock Exchange on Wall Street. In Germany, the highest volume of trading takes place in Frankfurt, but there are also regional stock exchanges in Düsseldorf, Stuttgart, Hamburg, Hanover, Berlin and Munich. For years, conventional floor trading has been losing ground to electronic trading systems like the Frankfurt Stock Exchange’s XETRA.

Stock price/ Share price/ Trade price

The price of a stock on a stock exchange, determined as a function of supply and demand.

Stock types

German stocks are generally categorized on the basis of several criteria:
(1) According to how the company’s capital stock is divided up:
a) Shares with a specific par value
b) “No-par” shares worth a certain fraction (such as 1/1000) of the capital stock (a theoretical or “notional” value).
(2) According to how ownership can be transferred:
a) “Bearer” shares may be transferred by a simple agreement and transfer of ownership.
b) “Registered” shares are recorded in the company’s register of stockholders, and their sale must be memorialized with a transfer notation.
c) “Restricted” registered shares cannot be transferred without the consent of the company’s board of management.
(3) According to the rights associated with the stock:
a) “Common” stock endows the owner with all rights as provided under Germany’s Stock Corporation Act (the “Aktiengesetz”).
b) “Preferred” stock usually does not entitle the owner to voting rights, but does entitle the stockholder to higher dividends or other preferential rights.
The capital stock of Bayer AG is represented by common stock only. All shares are no-par registered shares.

Stockholder value

See shareholder value

Stockholders' Newsletter

A publication, normally issued three times a year, in which Bayer provides an interim report on the Group’s business performance for the first, second and third quarter, respectively, together with a selection of topical news items about corporate activities. In spring of the following year the company then issues the Annual Report for the entire fiscal year.

Stockholders´ equity

See equity


When a company is to be newly listed on the stock exchange, potential investors can subscribe for shares once the issue price range has been set. In this process, each potential investor is required to indicate the number of shares he/she is willing to buy and at what maximum price.

Subscription right

See preemptive right

Supervisory board

Together with the board of management and the annual stockholders’ meeting, the supervisory board is one of the three legally required governance bodies of a German stock corporation. Its duties include overseeing the company’s management. A person cannot be a member of both the supervisory board and the board of management. Members of the supervisory board need not be stockholders of the corporation they supervise. The size of the supervisory board is defined by law and depends on the number of employees. Half of the 20 members of Bayer’s supervisory board are elected by the stockholders, and half are elected by the employees. The stockholder representatives are elected by the annual stockholders’ meeting, while the employees elect their representatives indirectly through electors.

Syndicated credit facility

Credit line agreed with a group of banks. Generally used for ­extensive financing requirements, such as when making an acquisition, to increase the available liquidity reserves or as security for the issuance of debt instruments. The credit facility can be utilized and repaid flexibly, ­either in full or in portions, ­during its term.


Synergy is the positive effect that results from the combining of two companies or corporate units or from collaboration between them.



A portion of a securities issue that is carried out not all at once, but in several segments at different dates, and possibly at different interest rates or – in the case of international bonds -  in different currencies.



Abbreviation for United States Generally Accepted Accounting Principles. These principles are published by the Financial Accounting Standards Board (FASB) and recognized by the SEC. Like the IFRS, they are also of international significance.


Venture Capital

Equity provided by specialized venture capital companies or funds to start-up companies, e.g. in high-tech sectors, that are unable to finance their own growth.


A measure of the relative extent of fluctuation of stock prices. If a stock’s price fluctuates widely, the stock is said to be very volatile. Higher volatility means a higher risk for investors.

Voting right

Right conferred upon shareholders to participate in decisions at the Annual Shareholders' Meeting (usually one vote per share). Every shareholder can transfer his or her voting right to his or her security deposit bank or another shareholder-meeting participant per proxy.


Wall Street

see NYSE


A warrant certifies the right (not the obligation), to purchase (call option) or sell (put option) shares within a certain period or at a certain time for a previously agreed amount (strike price). If the strike price for a call option (put option) is lower (higher) than the current share price, the option has an intrinsic value. In addition to the intrinsic value, an option also has a fair value because its intrinsic value may increase over the remaining term.

Warrant bond

Security that represents a combination of a conventional bond and a stock option (call option). Along with the right to receive payments of interest and principal, the owner of a warrant bond also has the right to purchase shares at fixed conditions within a set period. The bond runs until maturity whether or not the option is exercised.

Weighted average cost of capital (WACC)

The weighted average cost of capital (WACC) represents the return expected by investors on the capital invested in the company. It is computed as a weighted average of the cost of equity and debt. The cost of equity is derived from capital market information and represents the return expected by stockholders, while the cost of debt represents the conditions at which the company can borrow money over the long term.

Withholding tax

A tax on employment or investment income that is deducted by the payer of the income on the recipient’s behalf and paid over directly to the tax authorities. For example, capital gains tax is a withholding tax that is paid directly by the financial institution rather than the investor.


German abbreviation for Wertpapierkennnummer. Shares, bonds, investment certificates and warrants listed in Germany can be clearly identified by this six-figure security code number. The WKN for Bayer shares is BAY001.

Working capital

Working capital is the difference between short-term current assets and short-term liabilities. It is calculated by deducting short-term liabilities from current assets (excluding cash and cash equivalents). In financial accounting, the change in working capital is one of the variables used to assess a company’s financial health. The objective of working capital management is to reduce working capital by minimizing the “financing gap” caused by the time lapse between the disbursement of funds (= payment for necessary raw materials) and the receipt of funds for the finished product.


See impairment



Acronym for Exchange Electronic Trading, a computerized securities trading system. The 40 DAX blue chips, the 50 MDAX shares, other select stock, equity warrants and a number of government bonds are traded on Xetra. Xetra replaced the former IBIS system for the German equity market on November 28, 1997.


Market segment of Deutsche Börse for exchange-traded funds.