Tag Archives: Uncle Sam
Here's How Capital Senior Living Is Making You So Much Cash
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Capital Senior Living (NYS: CSU) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, Capital Senior Living generated $34.1 million cash while it booked a net loss of $3.1 million. That means it turned 11.2% of its revenue into FCF. That sounds pretty impressive.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at Capital Senior Living look?
Source: FULL ARTICLE at DailyFinance
Is AmerisourceBergen a Cash Machine?
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on AmerisourceBergen (NYS: ABC) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, AmerisourceBergen generated $1,192.0 million cash while it booked net income of $559.0 million. That means it turned 1.5% of its revenue into FCF. That doesn’t sound so great.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at AmerisourceBergen look? Take a peek at the chart
Source: FULL ARTICLE at DailyFinance
Is CDI a Cash Machine?
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on CDI (NYS: CDI) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, CDI generated $30.9 million cash while it booked net income of $19.1 million. That means it turned 2.8% of its revenue into FCF. That doesn’t sound so great.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at CDI look? Take a peek at the chart
Source: FULL ARTICLE at DailyFinance
Is Sykes Enterprises's Cash Flow Just For Show?
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Sykes Enterprises (NAS: SYKE) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, Sykes Enterprises generated $47.9 million cash while it booked net income of $28.4 million. That means it turned 4.2% of its revenue into FCF. That sounds OK.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at Sykes Enterprises look? Take a peek at the
Source: FULL ARTICLE at DailyFinance
Why LogMeIn's Earnings Are Outstanding
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on LogMeIn (NAS: LOGM) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, LogMeIn generated $20.4 million cash while it booked a net loss of $2.3 million. That means it turned 14.2% of its revenue into FCF. That sounds pretty impressive.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at LogMeIn look? Take a peek at the chart
Source: FULL ARTICLE at DailyFinance
Can You Trust the Cash Flow at AAR?
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on AAR (NYS: AIR) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, AAR generated $111.4 million cash while it booked net income of $67.3 million. That means it turned 5.2% of its revenue into FCF. That sounds OK.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at AAR look? Take a peek at the chart below, which
Source: FULL ARTICLE at DailyFinance
You Can Grow Your Tax-Free Retirement Plan Beyond Obama's $3 Million Limit
By Robert Lenzner, Forbes Staff There is one saving grace in President Obama‘s attempt to put a limit on how much money you can set aside in your tax-free 401k retirement account. Thanks to the aid of Janet Novack, Forbes Media Washington Bureau Chief and veteran chief tax guru, we now understand that your 401k can grow beyond the $3 million level from “investment earnings and gains” in the stock market— meaning that astute investment decisions like concentrating on stocks like Berkshire Hathaway or other steady gainers can drive up the value of your retirement cache. This the path to go beyond the Obama proposal which recommends that “If a tax payer reached the maximum permitted accumulation, no further contributions or accruals would be permitted.” In other words neither you nor your employer could make new contributions on your behalf. There is one other meaningful and sensible proposal that would limit the length of time you can pass on your tax-free account to your children and allow them to continue to aggregate assets without paying taxes on them or the income they provide. Under Obama‘s plan, your heirs would have to withdraw the money within 5 years of your death from the tax-free IRA or 401k and pay taxes on it. It could not be extended without limit from generation to generation. Here is our Janet Novack‘s take on the matter. ” I say don’t cap IRAs, but eliminate stretch IRAs. If we want to defer tax on all savings as long as possible, we would need to go to a graduated consumption tax. But that’s not where we are. Instead, this is a tax break specifically for retirement– and that’s my argument against stretch IRAs…. You either cap IRAs, or you make sure Uncle Sam gets his money within the saver’s lifespan. I vote for the latter.”
Don't Get Too Worked Up Over DTE Energy's Earnings
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on DTE Energy (NYS: DTE) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, DTE Energy generated $389.0 million cash while it booked net income of $610.0 million. That means it turned 4.4% of its revenue into FCF. That sounds OK. However, FCF is less than net income. Ideally, we’d like to see the opposite.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So
From: http://www.dailyfinance.com/2013/04/18/dont-get-too-worked-up-over-dte-energys-earnings/
Has AMN Healthcare Services Made You Any Real Money?
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on AMN Healthcare Services (NYS: AHS) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, AMN Healthcare Services generated $55.0 million cash while it booked net income of $17.1 million. That means it turned 5.8% of its revenue into FCF. That sounds OK.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at AMN Healthcare Services look? Take a
From: http://www.dailyfinance.com/2013/04/18/has-amn-healthcare-services-made-you-any-real-mon/
Why Multi-Fineline Electronix's Earnings May Not Be So Hot
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Multi-Fineline Electronix (NAS: MFLX) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, Multi-Fineline Electronix generated $9.4 million cash while it booked net income of $24.3 million. That means it turned 1.1% of its revenue into FCF. That doesn’t sound so great. FCF is less than net income. Ideally, we’d like to see the opposite.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those
From: http://www.dailyfinance.com/2013/04/18/why-multi-fineline-electronixs-earnings-may-not-b/
Why Wausau Paper's Earnings May Not Be So Hot
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Wausau Paper (NYS: WPP) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, Wausau Paper burned $113.5 million cash while it booked net income of $0.7 million. That means it burned through all its revenue and more. That doesn’t sound so great. FCF is less than net income. Ideally, we’d like to see the opposite.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those
From: http://www.dailyfinance.com/2013/04/18/why-wausau-papers-earnings-may-not-be-so-hot/
Why the Street Should Love CareFusion's Earnings
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on CareFusion (NYS: CFN) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, CareFusion generated $628.0 million cash while it booked net income of $320.0 million. That means it turned 17.3% of its revenue into FCF. That sounds pretty impressive.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at CareFusion look? Take a peek at the chart below,
From: http://www.dailyfinance.com/2013/04/18/why-the-street-should-love-carefusions-earnings/
Is Franklin Covey's Cash Machine Shutting Down?
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Franklin Covey (NYS: FC) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, Franklin Covey generated $13.9 million cash while it booked net income of $9.5 million. That means it turned 7.8% of its revenue into FCF. That sounds OK.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at Franklin Covey look? Take a peek at the
From: http://www.dailyfinance.com/2013/04/15/is-franklin-coveys-cash-machine-shutting-down/
Is Grupo Televisa Making You Any Cash?
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Grupo Televisa (NYS: TV) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, Grupo Televisa generated $917.8 million cash while it booked net income of $674.9 million. That means it turned 17.2% of its revenue into FCF. That sounds pretty impressive.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at Grupo Televisa look? Take a peek at
From: http://www.dailyfinance.com/2013/04/15/is-grupo-televisa-making-you-any-cash/
Why the Street Should Love Microsemi's Earnings
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Microsemi (NAS: MSCC) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, Microsemi generated $135.0 million cash while it booked net income of $29.1 million. That means it turned 13.2% of its revenue into FCF. That sounds pretty impressive.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at Microsemi look? Take a peek at the chart below,
From: http://www.dailyfinance.com/2013/04/15/why-the-street-should-love-microsemis-earnings/
Is PetSmart Making You Any Cash?
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on PetSmart (NAS: PETM) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, PetSmart generated $514.5 million cash while it booked net income of $389.5 million. That means it turned 7.6% of its revenue into FCF. That sounds OK.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at PetSmart look? Take a peek at the chart below, which
From: http://www.dailyfinance.com/2013/04/15/is-petsmart-making-you-any-cash/
Obama Goes Against the Grain of What America Represents
By Robert Lenzner, Forbes Staff I call Obama‘s attempt to put a limit on the tax-free savings opportunity like a 401K to be an outrageous piece of statist interference in the free market. How dare you tell me I can’t put more than $3 million away in my 401K if I’m able? What right have you to dictate that I’ll be able to make do on $205,000 a year? It’s this kind of interference in a climate where savings aren’t growing except for 2% of America that’s going to fuel another bout of accusations that Obama is at least some kind of Socialist. So only 100,000 people today would no longer be able to increase the assets in their 401K beyond $3 million,. and they would only be allowed to take out $205,000 annually for living expenses. I’m sorry– but this sends a terrible message to ambitious Americans who need to provide living and health expenses in their retirement, who are faced with $50,000 a year tuition for their children– and who know damn well that more cuts are coming to Social Security and Medicare– at the same time the yield on the safest securities are yielding less than 2% over the next decade. What kind of a signal is this proposal to Americans who are only saving at a rate of 2.5%– rather than 6.5%, who have seen defined pension plans be phased out, and who are frightened about how they are going to be able to afford the last 20 years of their life? Why go after 100,000 401ks with more than $3 million when Uncle Sam has no plans to limit the extent of deferred compensation in the many millions for most leading corporate and bank executives. Not to speak of the trillion or so that corporations are holding abroad without paying Uncle Sam any tax at all? The whole thrust of this recommendation goes against the grain of becoming self-sufficient, taking care of your own finances rather than depending on handouts. Don’t harm anyone’s self-created safety net at this time. Better to do something positive for the average 401K holder who has only about $75,000 in his 401k. The real crisis is how to keep safe and sound the average American saver with not much more than $25,000, according to Fidelity Investments. I don’t know how this huge cohort of the population is going to survive. Croesus is perplexed, because this proposal will outrage a good more many people than myself, and is a terrible, ridiculous non-starter that makes Obama look like he is out-of-touch– that he’s dreaming of some utopia where he can retool the the system of tax benefits that were set up some time ago. We want Americans to be self-sufficient– and yet we are signaling that the rules of the game can be changed at any time. Like the 45% tax on estates over $3.5 million that will take away half the proceeds of a small business or professional man on his death that was meant to
1 Thing Worth Watching at Papa John's International
By Seth Jayson, The Motley Fool
Filed under: Investing
Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company’s economic output. That’s because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings’ unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Papa John’s International (NAS: PZZA) , whose recent revenue and earnings are plotted below.
Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.
Over the past 12 months, Papa John’s International generated $61.8 million cash while it booked net income of $61.7 million. That means it turned 4.6% of its revenue into FCF. That sounds OK.
All cash is not equal
Unfortunately, the cash flow statement isn’t immune from nonsense, either. That’s why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don’t appear on the income statement (such as major capital expenditures).
For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it’s ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.
So how does the cash flow at Papa John’s International look? Take a
From: http://www.dailyfinance.com/2013/04/15/1-thing-worth-watching-at-papa-johns-international/
Think Your Taxes Are High? The 5 Countries With the Highest Taxes
By Eric Bleeker, CFA, The Motley Fool
Filed under: Investing
Tomorrow’s D-Day for tax filers across the United Sates. While its easy to bemoan your tax rate, especially if you owe money to Uncle Sam, the United States actually has a relatively low personal tax rate compared with other countries.
Last October, accounting firm KPMG put together a study of the countries with the world’s highest tax rates on personal income. Not surprisingly, Europe was among the most-taxed regions. Western Europe led all world regions with a 46.1% tax rate on personal incomes. By contrast, North America stood at 27.7%.
Also, while the top income-tax bracket for America is jumping to 39.6% this year, it stands neck-and-neck with Spain for having the world’s highest income level where the highest rate of taxes takes effect.
Clearly, taxes are a matter of significant controversy. Not only do tax codes and deductions vary wildly by country, but the services a citizen receives for his or her tax dollars also differ. Services are difficult to measure in an objective manner, but KPMG tried looking beyond purely top tax rates by measuring effective taxes for people who earn both $100,000 and $300,000 per year.
Let’s look which countries’ citizens had the highest tax burden in 2012, and how they compare with the United States.
1. Belgium
- 2012 top rate of income taxes: 50%
- Effective tax rate on $100,000: 47% (13.1% Social Security, 33.9% income tax)
- World rank on effective tax rate of $100,000: 1
- Effective tax rate on $300,000: 53.4% (13.1% Social Security, 40.3% income tax)
- World rank on effective tax rate of $300,000: 2
2. Italy
- 2012 top rate of income taxes: 43%
- Effective tax rate on $100,000: 45.2% (9.6% Social Security, 35.6% income tax)
- World rank on effective tax rate of $100,000: 4
- Effective tax rate on $300,000: 51.8% (10% Social Security, 41.8% income tax)
- World rank on effective tax rate of $300,000: 3
3. France
- 2012 top rate of income taxes: 45%
- Effective tax rate on $100,000: 42% (22% Social Security, 20% income tax)
- World rank on effective tax rate of $100,000: 8
- Effective tax rate on $300,000: 54% (20% Social Security, 34% income tax)
- World rank on effective tax rate of $300,000: 1
4. Denmark
- 2012 top rate of income taxes: 55.4%
- Effective tax rate on $100,000: 42.3% (0.2% Social Security, 42.1% income tax)
- World rank on effective tax rate of $100,000: 6
- Effective tax rate on $300,000: 51.5% (0.1% Social Security, 51.4% income tax)
- World rank on effective tax tate of $300,000: 4
5. Greece
- 2012 top rate of income taxes: 45%
- Effective tax rate on $100,000: 46.5% (16.5% Social Security, 30% income tax)
- World rank on effective tax rate of $100,000: 2
- Effective tax rate on $300,000: 45.1% (5.6% Social Security, 39.5% income tax)
- World rank on effective tax rate of $300,000: 14
For comparison: The United States
- 2012 top rate of income taxes: 35% (rising to 39.6% in 2013)
- Effective tax rate on $100,000: 26% (7.3% Social Security, 18.7% income tax)
- World rank on effective tax rate of $100,000: 55
- Effective tax rate on $300,000: 30.5% (3.7% Social Security, 26.8%
From: http://www.dailyfinance.com/2013/04/14/think-your-taxes-are-high-the-5-countries-with-the/