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

To: A.L. Reagan who wrote (52198)	7/19/2002 12:16:32 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 54805

Hi A.L. This part tricky: I further agree with you that expensing the stock options via Black-Scholes is not the entire answer to get A and B on the same playing field, since as you said the Black-Scholes expense will just get added back to GAAP earnings to get cash flow from operations. There's an argument can be made to have this adjustment under cash flow from financing rather than cash flow from operations. Then there's this: ... real FCF isn't just cash flow from ops less investment in replacement fixed assets Yes. I agree. This is the the "popular" version of FCF. Which is CFO - capital expenditure. Instead of the "classic" version GAAP + (depreciation - Capital expenditure), we have (GAAP + depreciation + a bunch of other things) - Capital Expenditure. John