Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] Re:Cash Flow
Date: Wed, 13 Feb 2002 12:23:23 -0600
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Hi jans,
Just a cautionary note. If you are looking at DGO earnings numbers, =
remember that they are *proforma* earnings. That means that certain one =
time items my be added back to the GAAP earnings. The other thing to be =
careful about is to make sure that you're comparing apples to apples. =
The cash flow figures can be stated in terms of the fiscal year or the =
trailing twelve months. (TTM). Make sure you're looking at cash flow and =
EPS from the same periods.
- --Katherine
Here's some definitions and a link to the MIMS financials on Multex =
Investor:
=20
Cash Flow: =
http://yahoo.marketguide.com/MGI/mg.asp?target=3D%2Fstocks%2Fcompanyinfor=
mation%2Fcacheflow%2Facashflowstd&Ticker=3DMIMS
Earnings: =
http://yahoo.marketguide.com/MGI/mg.asp?target=3D%2Fstocks%2Fcompanyinfor=
mation%2Fincomestmt%2Faincomestd&Ticker=3DMIMS
Multex Investor Cash Flow Definitions:
Cash Flow Per Share, TTM ($ per share)--This value is the trailing =
twelve month Cash Flow divided by the trailing twelve month Average =
Shares Outstanding. Cash Flow is defined as the sum of Income After =
Taxes minus Preferred Dividends and General Partner Distributions plus =
Depreciation, Depletion and Amortization.
Cash From Financing--The sum of all the individual financing activity =
cash flow line items.
Cash From Investing--The sum of all the individual investing activity =
cash flow line items.
Cash From Operations --The sum of all the individual operating activity =
cash flow line items.=20
Cash Per Share, Quarterly, MRQ ($ per share) --This is the Total Cash =
plus Short Term Investments divided by the Shares Outstanding at the end =
of the most recent fiscal quarter.=20
DGO Cash Flow Definition--CASH FLOW PER SHARE FROM OPERATIONS:
Derived by adding depreciation, depletion and amortization to the =
company's net income and dividing this figure by the shares outstanding. =
Free Cash Flow =
http://moneycentral.msn.com/investor/glossary/glossary.asp?TermID=3D186
This is cash flow from operations minus capital expenditures minus cash =
dividends paid -- at least in the view of some analysts. The truth is =
that opinions differ about what constitutes ""free"" cash flow and how =
- -- or whether -- it differs from conventional cash flow. The premise =
behind backing out capital expenditures and dividends is that these are =
optional and therefore should be set aside to see how much income a =
company is really generating. The dividend could always be suspended, =
after all, and even capital intensive firms can usually limp along for =
awhile on reduced capital outlays. The goal is the same as with cash =
flow: to look behind the smoke and mirrors sometimes associated with net =
income.
Cash Flow =
http://moneycentral.msn.com/investor/glossary/glossary.asp?TermID=3D65
Net income minus preferred dividends plus depreciation (as given in the =
income statement). Generally speaking, cash flow is the best measure of =
a company's profits, and is usually calculated by adding depreciation =
and any other non-cash charges to earnings after taxes. Investors look =
to cash flow for several reasons: because firms have accounting leeway =
when it comes to reporting net income; because depreciation charges, =
while substantial in many industries, aren't genuine bills that have to =
be paid; and because cash flow is the key to a company's ability to pay =
dividends, cover debts and so forth. Thus, some analysts focus on the =
ratio of price to cash flow rather than the traditional price/earnings =
(P/E) measure. Cash flow is especially useful in assessing firms in =
capital intensive industries -- cable TV, for instance -- in which huge =
depreciation charges can hide healthy profits.
----- Original Message -----=20
From: Spencer48@aol.com=20
To: canslim@lists.xmission.com=20
Sent: Wednesday, February 13, 2002 11:08 AM
Subject: [CANSLIM] Re:Cash Flow
Tom: =20
In your view how could cash-flow be less than earnings. I =
thought that=20
cash-flow were earnings minus the non-cash-expense items on the income =
sheet=20
(such as depreciation and goodwill amortization)? =20
Also, could you be specific. I see some companies with =
interesting=20
formations (MIMS for one) whose cash-flow is less than earnings. How =
is it=20
possible to do this? Are the Accounts Receivable so high (ie. higher =
than=20
all the non-cash-expenses added together) that the company doesn't=20
realistically expect to be paid, but the earnings are booked anyway?
jans
-
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<DIV>Hi jans,</DIV>
<DIV> </DIV>
<DIV>Just a cautionary note. If you are looking at DGO earnings numbers, =
remember that they are *proforma* earnings. That means that certain one =
time=20
items my be added back to the GAAP earnings. The other thing to be =
careful about=20
is to make sure that you're comparing apples to apples. The cash flow =
figures=20
can be stated in terms of the fiscal year or the trailing twelve months. =
(TTM).=20
Make sure you're looking at cash flow and EPS from the same =
periods.</DIV>
<DIV> </DIV>
<DIV>--Katherine</DIV>
<DIV> </DIV>
<DIV>Here's some definitions and a link to the MIMS financials on Multex =
Investor:</DIV>
<DIV> </DIV>
<DIV>Cash Flow: <A=20
href=3D"http://yahoo.marketguide.com/MGI/mg.asp?target=3D%2Fstocks%2Fcomp=
anyinformation%2Fcacheflow%2Facashflowstd&Ticker=3DMIMS">http://yahoo=
.marketguide.com/MGI/mg.asp?target=3D%2Fstocks%2Fcompanyinformation%2Fcac=
heflow%2Facashflowstd&Ticker=3DMIMS</A></DIV>
<P class=3DMsoNormal>Earnings: <A=20
href=3D"http://yahoo.marketguide.com/MGI/mg.asp?target=3D%2Fstocks%2Fcomp=
anyinformation%2Fincomestmt%2Faincomestd&Ticker=3DMIMS">http://yahoo.=
marketguide.com/MGI/mg.asp?target=3D%2Fstocks%2Fcompanyinformation%2Finco=
mestmt%2Faincomestd&Ticker=3DMIMS</A></P>
<P class=3DMsoNormal><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"> </SPAN><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"><FONT =
color=3D#0000ff>Multex Investor=20
Cash Flow Definitions</FONT>:<?xml:namespace prefix =3D o ns =3D=20
"urn:schemas-microsoft-com:office:office" /><o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN style=3D"mso-fareast-font-family: 'MS =
Mincho'">Cash Flow=20
Per Share, TTM ($ per share)--</SPAN><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">This value is the =
trailing twelve=20
month Cash Flow divided by the trailing twelve month Average Shares =
Outstanding.=20
Cash Flow is defined as the sum of Income After Taxes minus Preferred =
Dividends=20
and General Partner Distributions plus Depreciation, Depletion and=20
Amortization.<o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"> </SPAN><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">Cash From =
Financing--</SPAN><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">The sum of all the =
individual=20
financing activity cash flow line items.<o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"><o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN style=3D"mso-fareast-font-family: 'MS =
Mincho'">Cash From=20
Investing--</SPAN><SPAN style=3D"mso-fareast-font-family: 'MS =
Mincho'">The sum of=20
all the individual investing activity cash flow line=20
items.<o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"><o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN style=3D"mso-fareast-font-family: 'MS =
Mincho'">Cash From=20
Operations --</SPAN><SPAN style=3D"mso-fareast-font-family: 'MS =
Mincho'">The sum=20
of all the individual operating activity cash flow line items.=20
<o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'"> </SPAN><SPAN=20
style=3D"mso-fareast-font-family: 'MS Mincho'">Cash Per Share, =
Quarterly, MRQ ($=20
per share) --</SPAN><SPAN style=3D"mso-fareast-font-family: 'MS =
Mincho'">This is=20
the Total Cash plus Short Term Investments divided by the Shares =
Outstanding at=20
the end of the most recent fiscal quarter. </SPAN></P>
<P class=3DMsoNormal><SPAN style=3D"mso-fareast-font-family: 'MS =
Mincho'"><FONT=20
color=3D#0000ff>DGO Cash Flow Definition</FONT>--CASH FLOW PER SHARE =
FROM=20
OPERATIONS:<BR>Derived by adding depreciation, depletion and =
amortization to the=20
company's net income and dividing this figure by the shares outstanding. =
<o:p></o:p></SPAN></P>
<P class=3DMsoNormal><SPAN class=3Dheading31><SPAN=20
style=3D"FONT-SIZE: 11pt; FONT-FAMILY: Arial"><STRONG><FONT =
color=3D#3d3d8d>Free=20
Cash Flow<SPAN style=3D"mso-spacerun: yes"> =
</SPAN></FONT></STRONG><A=20
href=3D"http://moneycentral.msn.com/investor/glossary/glossary.asp?TermID=
=3D186"><SPAN=20
style=3D"FONT-WEIGHT: normal"><A=20
href=3D"http://moneycentral.msn.com/investor/glossary/glossary.asp?TermID=
=3D186">http://moneycentral.msn.com/investor/glossary/glossary.asp?TermID=
=3D186</SPAN></A></A></SPAN></SPAN></P>
<P class=3DMsoNormal><SPAN class=3Dheading31><SPAN=20
style=3D"FONT-SIZE: 11pt; FONT-FAMILY: Arial"></SPAN></SPAN><SPAN=20
class=3Dheading31><SPAN=20
style=3D"FONT-SIZE: 11pt; FONT-FAMILY: Arial"> </SPAN></SPAN>This =
is cash=20
flow from operations minus capital expenditures minus cash dividends =
paid -- at=20
least in the view of some analysts. The truth is that opinions differ =
about what=20
constitutes ""free"" cash flow and how -- or whether -- it differs from=20
conventional cash flow. The premise behind backing out capital =
expenditures and=20
dividends is that these are optional and therefore should be set aside =
to see=20
how much income a company is really generating. The dividend could =
always be=20
suspended, after all, and even capital intensive firms can usually limp =
along=20
for awhile on reduced capital outlays. The goal is the same as with cash =
flow:=20
to look behind the smoke and mirrors sometimes associated with net =
income.</P>
<P class=3DMsoNormal><SPAN class=3Dheading31><SPAN=20
style=3D"FONT-SIZE: 11pt; FONT-FAMILY: Arial"><STRONG><FONT =
color=3D#3d3d8d>Cash=20
Flow<SPAN style=3D"mso-spacerun: yes"> </SPAN></FONT></STRONG><A=20
href=3D"http://moneycentral.msn.com/investor/glossary/glossary.asp?TermID=
=3D65"><SPAN=20
style=3D"FONT-WEIGHT: normal"><A=20
href=3D"http://moneycentral.msn.com/investor/glossary/glossary.asp?TermID=
=3D65">http://moneycentral.msn.com/investor/glossary/glossary.asp?TermID=3D=
65</SPAN></A></A></SPAN></SPAN></P>
<P class=3DMsoNormal><SPAN class=3Dheading31><SPAN=20
style=3D"FONT-SIZE: 11pt; FONT-FAMILY: Arial"></SPAN></SPAN><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; =
mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; =
mso-fareast-language: EN-US; mso-bidi-language: AR-SA">Net=20
income minus preferred dividends plus depreciation (as given in the =
income=20
statement). Generally speaking, cash flow is the best measure of a =
company's=20
profits, and is usually calculated by adding depreciation and any other =
non-cash=20
charges to earnings after taxes. Investors look to cash flow for several =
reasons: because firms have accounting leeway when it comes to reporting =
net=20
income; because depreciation charges, while substantial in many =
industries,=20
aren't genuine bills that have to be paid; and because cash flow is the =
key to a=20
company's ability to pay dividends, cover debts and so forth. Thus, some =
analysts focus on the ratio of price to cash flow rather than the =
traditional=20
price/earnings (P/E) measure. Cash flow is especially useful in =
assessing firms=20
in capital intensive industries -- cable TV, for instance -- in which =
huge=20
depreciation charges can hide healthy profits.</SPAN></P>
<DIV> </DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3DSpencer48@aol.com=20
href=3D"mailto:Spencer48@aol.com">Spencer48@aol.com</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Wednesday, February 13, =
2002 11:08=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Re:Cash =
Flow</DIV>
<DIV><BR></DIV>Tom: <BR><BR> In your =
view how=20
could cash-flow be less than earnings. I thought that =
<BR>cash-flow were=20
earnings minus the non-cash-expense items on the income sheet =
<BR>(such as=20
depreciation and goodwill amortization)? =20
<BR><BR> Also, could you be specific. I =
see some=20
companies with interesting <BR>formations (MIMS for one) whose =
cash-flow is=20
less than earnings. How is it <BR>possible to do =
this? Are=20
the Accounts Receivable so high (ie. higher than <BR>all the =
non-cash-expenses=20
added together) that the company doesn't <BR>realistically expect to =
be paid,=20
but the earnings are booked anyway?<BR><BR>jans<BR><BR>-<BR>-To=20
subscribe/unsubscribe, email "<A=20
=
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In=
the=20
email body, write "subscribe canslim" or<BR>-"unsubscribe =
canslim". Do=20
not use quotes in your email.</BLOCKQUOTE></BODY></HTML>
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