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Gold/Mining/Energy : Canadian Small Cap Stocks

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To: Friend who wrote (228)	7/30/1998 9:42:00 PM
From: Ally	of 512

>Had a quick question regarding a financial indicator you had in your last post. Can you please explain to me what you mean by "positive cash value added" and how you calculate that.< Companies now hold seminars to explain Economic Value Added to executives. Cash Value Added (CAV) is an off shoot of EVA. It's not an easy theory to explain within the confines and purpose of this thread. In a nut shell, CAV measures the net present value of cash inflows based on a risk-related cost of money on capital. For CSI, the break-even point where cash flow turned positive was around 14%. This is fair... I would like it better CAV turning positive around 18% for a micro-cap company such as CSI. I find CAV is a very important and reliable indicator, especially when measured quarterly. The absolute number, as well as the trend of the absolute numbers can forecast objectively earnings expectations. Stock prices go up when earnings trend go up, thus, the importance of CAV.

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