Gross cash flow = the cash flow from operations line
Net cash flow = the former less the cash flow used for investments and financing.
There are different interpretations of free cash flow, due primarily to the fact that what is needed to maintain the going concern is subjective and can very from industry to industry. For example, certain expenditures may be ancillary in a stable mature company but are absolutely necessary in a young high growth company. My study used the data from CompuStat and ValueLine, and was based on thier computations.
I have created a database of about five thousand north American companies' correlational data, comparing market value to cash flows, earnings, book value, revenues, enterprise value, PE, etc. in several industries such as banking, investment banking, insurance, semi's, software, data programming, and computer hardware. The info will serve as an extended HTML help file in corporate valuation software which I have developed. This eliminates the hype and rhetoric and gets down to the actual historical facts. |
