HSBC 2004 Annual Report Download - page 45

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Year ended 31 December
2004 2003
US$m %1US$m %1
Average shareholders’ funds before dividends................................................... 80,220 67,585
Add: dividends declared but not paid ............................................................... 1,888 1,773
Average shareholders’ funds ............................................................................. 82,108 69,358
Add: cumulative goodwill written off and amortised ....................................... 9,873 8,172
Less: property revaluation reserves ................................................................... (2,013) (1,824)
Average invested capital2 .................................................................................. 89,968 75,706
Profit after tax ................................................................................................... 13,101 14.6 9,696 12.8
Add: goodwill amortisation .............................................................................. 1,818 2.0 1,585 2.1
depreciation charged on property revaluations ........................................ 46 – 38 –
Less: equity minority interest ........................................................................... (586) (0.7) (487) (0.6)
preference dividends ............................................................................... (675) (0.7) (435) (0.6)
Return on invested capital3 ................................................................................ 13,704 15.2 10,397 13.7
Benchmark cost of capital ................................................................................. (8,997) (10.0) (9,463) (12.5)
Economic profit/spread ..................................................................................... 4,707 5.2 934 1.2
1Expressed as a percentage of average invested capital.
2Average invested capital is measured as shareholders’ funds after adding back goodwill amortised and goodwill previously written-off
directly to reserves and after deducting property revaluation reserves. This measure reflects capital initially invested and subsequent
profit (excluding goodwill amortisation).
3Return on invested capital is based on attributable profit excluding goodwill amortisation adjusted for depreciation attributable to
revaluation surpluses.