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Topic: Free cash flow

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	Foolish Fundamentals: Free Cash Flow
		Free cash flow is not perfect, but it is more difficult to manipulate than net income or earnings per share (more on this later).
		That said, free cash flow is what a company has left over at the end of the year -- or quarter -- after paying for all the salaries, bills, interest on debt, and taxes and after making capital expenditures to expand the business.
		Free cash flow is unbelievably easy to calculate, and both of the pieces you need to make the calculation can be found on the statement of cash flows.
	www.fool.com /news/commentary/2005/commentary05122914.htm (702 words)

	Serving Up Dividends: The 2004 Free Cash Flow Scorecard - CFO Magazine - January 2005 Issue - CFO.com
		What's more, the big increase in adjusted free cash was not primarily the result of reduced capital spending, as this was cut collectively by less than half the gain, or roughly 20 percent.
		As a result, the proportion of adjusted free cash represented by those dividend payouts fell from 40 percent to 28 percent.
		Cash that was returned to shareholders was typically done so with stock buybacks, given the preferred tax treatment," he notes.
	www.cfo.com /article.cfm/3515804?f=related (631 words)

	Venture Momentum Article - Have You Got Free Cash Flow?
		The company would have burnt nearly $6.4M in operating cash in 2005 (the details of the various components of the sources and uses of funds are shown in the statement of cash flows under the section titled “Cash flow from operating activities”).
		Positive free cash flow is typically non-existent in the life of early-stage start-ups, as they thrive to build their team, develop new products and take them to market.
		Free cash flow is very important to investors because it provides a measure of a company’s ability to generate cash for distribution to shareholders as dividends, and/or pursue new business opportunities.
	www.venturemomentum.com /cashflow.html (1385 words)

	Discussion and Solutions: Free Cash Flow
		Net cash flow from operations is the first major subtotal in the statement of cash flows.
		Free cash flow measures that begin with net income (such as FCF(1)) do not include operating cash flows that originated from transactions in previous periods, and do not include operating cash flows that pertain to future periods.
		The difference is that dividends are considered a required cash flow in the first instance, and a discretionary cash flow in the second.
	www.swlearning.com /accounting/students/ca_cash_reso4.htm (1127 words)

	free cash flow Definition
		Free cash flow is the amount of cash that a company has left over after it has paid all of its expenses, including investments.
		Negative free cash flow is not necessarily an indication of a bad company, however, since many young companies put a lot of their cash into investments, which diminishes their free cash flow.
		While free cash flow doesn't receive as much media coverage as earnings do, it is considered by some experts to be a better indicator of a company's financial health.
	www.investorwords.com /2084/free_cash_flow.html (258 words)

	Cash Flow 1 - Accounting Base
		The importance of liquidity to a companyâs future cannot be overstated, and the cash flow statement is the report that indicates to reviewers of financial statements, the success or failure of a company to generate what it needs most to surviveâ¦.
		Cash flow from the three categories will be added together to produce the net increase/decrease in cash.
		Cash and cash equivalents at the end of the period (as shown on the Cash Flow Statement) should be equaled to the cash and cash equivalents total on the balance sheet for the same accounting period.
	www.accountingbase.com /CashFlow.html (1788 words)

	USATODAY.com - Follow the cash (Site not responding. Last check: )
		Free cash flow is the amount of cash a company brings into the doors as part of its normal operations.
		You'll see how the statement of cash flow starts with "net earnings" and then makes a number of adjustments to get to "cash from operating activities." In GE's case, cash from operating activities was $29.8 billion for the nine months ended Sept. 30.
		Analyzing free cash flow can be very valuable for investors because it shows if the company is truly generating cash, or if its profit is largely because of accounting conventions.
	www.usatoday.com /money/perfi/columnist/krantz/2006-04-20-free-cash-flow_x.htm?csp=34 (612 words)

	Free Cashflow method
		The Free Cashflow (Free Cash Flow) method is an expression of the amount of cash that is left over for the stockholders.
		Free Cashflow (Free Cash Flow method) is an important measure to shareholders.
		This is the cash that is left over after the payment of all cash expenses and operating investment required by the firm.
	www.valuebasedmanagement.net /methods_freecashflow.html (293 words)

	Zacks.com - Experts - Commentary - Richard Moroney
		Free cash flow equals cash provided by operations (from the statement of cash flows), minus capital expenditures and dividends.
		When free cash flow is positive, a company has flexibility to repay debt, repurchase shares, raise dividends, and expand via acquisitions and capital expenditures.
		Ball’s free cash flow, high relative to its history, is likely to fall a bit next year as the company boosts capital spending in all three of its major business units.
	www.zacks.com /experts/featured/view_article.php?art_id=1762&newsletter_id=33 (1271 words)

	Free Cash Flow Explanation
		After working on the FinanceInteractive CD and reading the discussion on the importance of cash flow in the Damodaran text, you may be have some questions about how to measure cash flow.
		Of the various measures of cash flow, the one called Free Cash Flow is perhaps the most prominent in finance applications.
		It is the amount of cash the firm generates via its productive activities, after all costs and investements needed to keep the firm going have been subtracted out.
	weatherhead.case.edu /laux/FastFinance/FCF.htm (820 words)

	Theory of free cash flow
		The theory of free cash flow states that investors are entitled to the sum of the operating and investing cash flows, plus any cash interest paid.
		Cash interest is included because it is seen as flowing to the debt holders of the firm.
		Free cash flow analysis demonstrated exactly how much of these earnings were consumed by new investment.
	www.spredgar.com /WebHelp/spredgar/theory_of_free_cash_flow.htm (982 words)

	Free Cash Flow
		Flow in fluid mechanics is the rate of movement of a fluid involume or mass per unit time, such as gallons per minute or pounds per hour.
		Flow, in psychology, is the feeling of complete and energized focus in an activity, with a high level of enjoyment andfulfillment as described by Mihaly Csikszentmihalyi.
		Flow in television is a term used about how channels tryto hold their audience by announcing the coming programs.
	www.altvetmed.com /face/41721-free-cash-flow.html (518 words)

	Free Cash Flow (Site not responding. Last check: )
		More specifically, free cash flow is usually defined as, "cash from operations" minus "capital expenditures." Both of these can be found on a company's cash flow statement, which will reside in its 10-K form.Accountants make adjustments to this figure to calculate net income.
		Free cash flow is not a replacement for net income.
		If a business is growing slowly, yet has negative free cash flow, perhaps there is an unhealthy buildup of inventory (note that an increase in inventory decreases free cash flow, but not net income).
	www.bronsteinreport.com /fcf.php (371 words)

	PepsiCo, Inc. 1997 Annual Report - -Free Cash Flow
		Free cash flow is a measure we use internally to evaluate our cash flow performance and should be considered in addition to, but not as a substitute for, other measures of financial performance in accordance with generally accepted accounting principles.
		In addition, free cash flow from continuing operations nearly doubled with improved cash flows from operating activities, larger proceeds arising from the sale of businesses and reduced capital spending.
		Both continuing and discontinued operations contributed to the $268 million or 25% increase in the 1996 free cash flow.
	www.pepsico.com /PEP_Investors/AnnualReports/97/financial/free_cash_flow.html (295 words)

	Free Cash Flow
		When valuing the operations of a firm using a discounted cash flow model, the operating cash flow is needed.
		The term "free cash flow" is used because this cash is free to be paid back to the suppliers of capital.
		An additional cash adjustment may be necessary for an increase in deferred taxes that would have a positive impact on cash flow.
	www.quickmba.com /finance/free-cash-flow (302 words)

	Free Cash Flow (FCF)
		In other words, free cash flow (FCF) represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base.
		Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value.
		Free Cash Flow: Free, But Not Always Easy - Free cash flow is a great gauge of corporate health, but it's not immune to accounting trickery.
	www.investopedia.com /terms/f/freecashflow.asp (532 words)

	Free Cash Flow (Site not responding. Last check: )
		Free cash flow is commonly calculated as operating cash flow less capital expenditures and dividends.
		Free cash flow, strictly speaking, is the amount of money left over from the operations of a company that is available for distribution owners of the capital employed in the company (stockholders, bondholders, preferred, etc).
		Free cash flow to equity = ((ROE - G)*E) / (1 + CAPM).
	www.marketocracy.com /cgi-bin/WebObjects/Portfolio.woa/ps/ReadTopicPage/source=NjInEiDhDlIcOgFpMaKiAbNm/from=0 (1816 words)

	The Motley Fool UK: Qualiport, 21/01/2002
		Free cash flow is the measure of cash a company generates over and above what's required to sustain its current competitive position.
		I'd say the £43.9m free cash flow figure is a more reasonable and fair estimate than the earlier £41.0m.
		Although free cash flow is "the measure of cash a company generates over and above what's required to sustain its current competitive position", actually pinpointing the amount spent to sustain that competitive position (as opposed to enhancing it) is nigh on impossible.
	www.fool.co.uk /qualiport/2002/qualiport020121.htm (865 words)

	Turning Working Capital Into Free Cash Flow
		The result is excess working capital, and that means that too much cash is tied up in running the enterprise, too much capital is required to grow the enterprise, and the business faces unnecessary exposure by holding on to assets that are much riskier than cash.
		Based on this analysis we can make an initial determination about the amount of cash that can be turned into free cash flow and about the business process/rule changes required to release it.
		Based on this analysis, we can make an initial determination about the amount of cash that can be turned into free cash flow and about the business process/rule changes required to significantly reduce inventory.
	www.coplenish.com /FreeStuffPages/WorkingCapital.htm (994 words)

	The CPA Journal
		It is imperative to reach a consensus about the meaning of the terms cash flow and free cash flow because financial analysts routinely use such terms in their reports and companies provide their own calculations of them in the management's discussion and analysis and financial highlights sections of their annual reports.
		Analysts developed a surrogate for cash flows that in its simplest form was defined as "net profit plus depreciation." Creditors, on the other hand, wanted a figure that represented cash available to meet principal and interest payments, so they devised a calculation of earnings before interest, taxes, depreciation, and amortization (EBITDA).
		Others argue that FCF should represent the cash available after meeting all current commitments, that is, required payments made to continue operations (including dividends, current debt repayment, and regular capital reinvestment to maintain current operating activities).
	www.nysscpa.org /cpajournal/2002/0102/features/f013602.htm (1974 words)

	Free cash flow Teaching Business & Economics - Find Articles
		This is followed by an explanation of free cash flow, with examples from real life to illustrate why it is such an important concept for the financial analyst.
		Free cash flow is money earned from operations that a business can put aside at the end of an accounting period.
		Free cash flow is net cash flow from operating activities less capital expenditures, which are investments in property, plant, and equipment.
	findarticles.com /p/articles/mi_qa3889/is_200304/ai_n9175187 (828 words)

	Free cash flow Teaching Business & Economics - Find Articles
		This is followed by an explanation of free cash flow, with examples from real life to illustrate why it is such an important concept for the financial analyst.
		Free cash flow is money earned from operations that a business can put aside at the end of an accounting period.
		Free cash flow is net cash flow from operating activities less capital expenditures, which are investments in property, plant, and equipment.
	www.findarticles.com /p/articles/mi_qa3889/is_200304/ai_n9175187 (847 words)

	Free Cash Flow: Virtues of Free Cash flow
		Put simply, free cash flow is the money left over after a business has done everything it needs to run its business.
		If free cash flow continues to grow at around 25% per year (and we think it will), that leaves room for a double in just over three years.
		After all, this assumes the stock continues to trade at around 28X free cash flow, which is a bargain in our view, given the consistent growth in cash flow and earnings, and more specifically, our expectations for more of the same.
	www.ucs.louisiana.edu /~smr8609/free_cash_flow (788 words)

	Complete Growth Investor
		We believe that free cash flow -- the top metric of the best hedge funds -- and the performance it brings should be yours at a reasonable price, in language you understand, from guys who invest their own money alongside you in every selection.
		FCF is simply net cash from operations minus capital expenditures, subject to refinements not relevant here.
		Most companies put it clearly in the cash from operations of their cash flow statement — filed with the SEC quarterly and annually and freely available at www.sec.gov/edgar - but you need to do the simple math.
	www.completegrowth.com /index.php?option=content&task=view&id=97&Itemid=27 (1055 words)

	Equitymaster.com : Free cash flow: Is it free after all?
		As explained earlier, cash flows are dependant on the capital expenditure and working capital liabilities borne by the company.
		FCF is not only a mirror image of the present but also a sneak preview into the future.
		The implications of the components of cash flow may not be explained in the annual reports, but is left to the investor’s prudence to diligently scrutinize the same and try to read between the lines.
	www.equitymaster.com /detail.asp?date=5/13/2005&story=3 (695 words)

	Glossary (Site not responding. Last check: )
		If a company has positive cash flow, the company has money available to spend on research and development, to expand operations, and to pay dividends to investors.
		In this case, a company's cash flow is calculated from numbers provided on the income statement and reflects net income minus preferred dividends plus depreciation and amortization.
		Free cash flow numbers are unavailable for financial companies.
	www.quicken.com /glossary/notemplates/content/?cashflow (198 words)

	Free Cash Flow: Free, But Not Always Easy
		However, while free cash flow is a great gauge of corporate health, it does have its limits and is not immune to accounting trickery.
		By establishing how much cash a company has after paying its bills for ongoing activities and growth, FCF is a measure that aims to cut through the arbitrariness and "guesstimations" involved in reported earnings.
		Regardless of whether a cash outlay is counted as an expense in the calculation of income or turned into an asset on the balance sheet, free cash flow tracks the money.
	www.investopedia.com /articles/fundamental/03/091703.asp (995 words)

	Beyond The Balance Sheet: Free Cash Flow - Forbes.com (Site not responding. Last check: )
		In this approach you focus not on a company's earnings but on its cash flow from operations, equal to the sum of earnings and depreciation and amortization, plus or minus changes in working capital items (like inventory or payables) that help or hurt a company's checking account balance.
		A fast-growing outfit might be plowing all its cash flow into expansion, leaving nothing for dividends, and still be a terrific investment.
		There ought to be some way to distinguish a cement company that has no free cash because it consumes all its cash replacing worn-out machinery, from a retailer gobbling all its cash on new locations.
	www.forbes.com /business/2005/08/17/05bbscashland.html (323 words)

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