In 1975, the first version of this Recommendations & Financial Ratios reference book was published by The Danish Finance Society and CFA Society Denmark. Since then updated versions of the guidelines have been released in 1976, 1987, 1991, 1997, 2005, 2010 and 2015.
The Norwegian Society of Financial Analysts joined the publication in 2005, and since 2010 a Nordic edition has been published in cooperation with the relevant societies in the Nordic countries.
Since 2017, the guidelines have been available online making it easier to make more frequent adjustments when needed. The reference book is now produced in English only.
2017 also marked the year where ESG ratios for the first time were included in the guidelines. In these years, ESG reporting is developing rapidly and investors are increasingly using ESG parameters as an integrated part of their investment decisions. New key figures and reporting requirements are constantly emerging within the ESG area.
In order to encompass the global trend of including more non-financial data in company reporting and financial analysis, we have updated chapter V, which includes the ESG key figures. More ESG key ratios have been added but also an example of an overview table has been included. The objective of the ESG key figures and the overview table is to harmonise and standardise the basic ESG reporting.
The work with updating the ESG key ratios has been done in collaboration with FSR - Danish Auditors and Nasdaq Copenhagen. A special thanks to Jane Jagd for her work in this connection.
The demand for further ESG key figures is expected to increase and this section in particular has further potential for expansion over time.
Recommendations & Financial Ratios is a tool for companies, financial analysts and investors to shed light on companies’ financial situations and trends. The guide cannot, however, be used as a substitute for the fundamental analysis, which is essential in order to understand companies, and which should form the basis of investment decisions. It is also recommended that special attention is paid to eventual changes in reporting principles, which could have a significant impact on companies' financial results.
Michael West Hybholt
Chairman of The Danish Finance Society's Committee for Accounting Standards