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To: Seeker of Truth who wrote (25985)	6/7/2000 1:25:00 PM
From: Tom Chwojko-Frank	Read Replies (1) \| Respond to of 54805

I think those advocating the flow ratio as a metric would agree with you. Like any corporate metric, it needs to be taken in context along with all the other metrics. No single number by itself will be very meaningful. Tom

To: Seeker of Truth who wrote (25985)	6/7/2000 2:16:00 PM
From: Mike Buckley	Respond to of 54805

Malcolm, I'm not convinced that I can easily know what the Flow ratio means. For reasons you mentioned along with a lot of others, the Flow Ratio is about as meaningless by itself as most other ratios. It needs to be taken in context. Because it is an indicator of management effectiveness, instead of being a valuation tool as so many other ratios are, it's a particularly astute method of showing the effectiveness in which cash is put to use. In summary, a company that pays its bills immediately and delays collecting its recievables is not using its cash as well as a company that collects its recievables as soon as possible but delays somewhat its payments. Anything in between those two extremes becomes a grayer and grayer area but is well worth looking at, especially the trend. That's because the Flow Ratio is at the core of the difference between earnings and free cash flow. Hope this helps. --Mike Buckley