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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (29149)	11/20/2002 8:28:11 AM
From: propitious7	Respond to of 197275

cash flow, last from me Mike Do not believe this board is generally interested in acctg analysis so this will be last from me. But I don't disagree with what you last wrote. Cash Flow = operating cash flow = cash flow from ops. The way I was taught they are one and the same. You take GAAP reported net income and add back most non-cash expenses. The largest of these (usually) are depreciation (of tangible capital assets)and amortization (of intangibles, like good will). But I agree if you can find the number (not usually reported separately) for that portion of stock option gain to employee which will be taxed as ordinary income (and which is, therefore, deductible by employer as employment expense and so shown as a cost), you would add back that non-cash expense to report cash flow (i.e. operating cash flow). QCOM on its pro forma results does show (on its reconciliation statement) this amount which is added to GAAP net income to report pro forma income. Free cash flow is meant to show the cash results of operations not committed to meet requirements of the business. So you take away capex and some would say take away dividends (while others would say dividends are discretionary and by being distributed to shareholders are the essence of what free cash flow should measure, i.e. cash not only available but actually distributed to shareholders). As I say, this is the way I was taught but I am no accountant. propitious