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Strategies & Market Trends : Value Investing
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To: TimbaBear who wrote (15027)8/2/2002 8:42:34 PM
From: Spekulatius   of 78595
 
Timba,
the fact is that DELL is indeed a cash machine but spends the cash generated by operations in a stock repurchases. However since the number of shares is apparently about flat, all the cash is essentially used up to eliminate diluation - or in other words DELL does not have any free cash flow at all. My own method of calculating Free cash flow does not use the income or cash flow statement at all:

I calculate the net cash change (cash- debt (long term and short term) of any given period - the only problem is that this can be distorted by asset sales or equity offerings so I back them out. This will also show that DELL does notm have any free cash flow.
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