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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: John Carragher who wrote (5705)	6/20/1999 10:49:00 AM
From: Steve Warkentin	Read Replies (1) \| Respond to of 7342

Thread, What do you all make of this article..... especially the last paragraph ? smartmoney.com

To: John Carragher who wrote (5705)	6/20/1999 1:59:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 7342

John, I think that there is a better way to look at free cash flow, although it is not easily calculated. According to this approach to free cash flow you determine the cash that could be dividended to shareholders now, without hurting future operations. So what we want is the operating cash flow less a provision for a sinking fund for the replacement of existing plant and equipment. This is different from the approach used in the article in two respects. First, the sinking fund is an annual payment (which will bear interest) that will exactly fund the replacement or refurbishment of existing facilities as they wear out. Second, the sinking fund does not include the capital requirements of new plant and equipment needed for expansion of the business. TTFN, CTC