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Strategies & Market Trends : Value Investing

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To: TimbaBear who wrote (13751)1/23/2002 12:36:07 PM
From: Don Earl  Read Replies (1) of 78921
 
<<<If cash flow was the highly publicized number, then cash flow accounting conventions would be more highly abused to make those numbers appear to be better or "more acceptable">>>

Just about every company out there pro formas the heck out of the numbers anyhow. My view is that free flow cash from operations should be reported along side GAAP EPS in the interest of full disclosure. There are plenty of sound reasons to invest cash in a business, and if a company wants to add commentary on why they used cash, I don't see any problem with that. The market needs some kind of "apples to apples" numbers which apply equally to every company and sector. I don't think it would be that hard to make one rule which is the same for everyone, especially since cash is sure to be something every company keeps track of anyhow.

Actually, I'm as cynical as you are. I don't think we'll ever see such a requirement. No one wants to admit how few publicly held companies are capable of producing profits in the form of cash.
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