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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Pirah Naman who wrote (50270)	2/10/2002 7:04:26 PM
From: Skeet Shipman	Read Replies (1) \| Respond to of 54805

There is fallacy in using the definition of free cash flow as real earnings. Capital expenditures are more precisely associated with future cash from operating earnings. So future cash from operating earnings less previous capital expenditures plus return on invested capital is more exactly earnings. For young growing companies capital investments provide for a significant portion of future earnings . There is obviously more company industry information to consider. If the capital investments are required to maintain sales rather than grow sales then your profit definition is correct. (Semiconductors)