Comments on: How to Tell a Good Company from a Bad Company: CASH FLOW STATEMENT

By: Rich Man

Rich Man — Sat, 22 Aug 2009 04:24:06 +0000

Lisa… Lisa. Free cash flow is when your daddy (sugar or not) give you “free” cash, sometimes in return for a favour or flavour.

By: Horizon.my

Horizon.my — Mon, 19 Jan 2009 12:34:29 +0000

[...] earlier article on Free Cash Flow, I touched on some of the adjustments we need to make on a company’s profits to arrive at the [...]

By: Lisa

Lisa — Wed, 24 Dec 2008 04:23:47 +0000

free cash flow? please enlighten me about it =D

and merry christmas!!

By: Freethinker

Freethinker — Tue, 23 Dec 2008 17:05:37 +0000

Hey Larry,

Din notice any new comments from you on my blog…

By: Know Your Investment - Part 1 : Horizon.my

Know Your Investment - Part 1 : Horizon.my — Tue, 23 Dec 2008 07:49:50 +0000

[...] Beware of Fake Profits What do I mean by this? It is easy for management to fudge the profit figure, eg boosting inventory value, or fake sales which go into receivables but never end up collected – sounds familiar? We will need to look at a thing called Free Cash Flow which I will explain next time. [...]

By: larry

larry — Tue, 23 Dec 2008 04:14:14 +0000

Lisa… yes I often wonder the same thing. Sadly many companies hide things and the statutory format really doesn’t help much. What most people need are simplified statements and some basic tools to navigate the financial scene.

Freethinker… thanks for your input. Yes we need to approach companies on a case-by-case basis. Maybe a more appropriate heading for this article should be “How to Identify Bad Companies”. From my experience, cash flow tells all. Except for Banks where Cash Flow Statement is quite meaningless and I find it more useful to look at several indicators to see how sound is the Balance Sheet. I’ve also posted my 2 sen worth on your blog

By: Freethinker

Freethinker — Mon, 22 Dec 2008 09:32:24 +0000

It is an ever interesting argument on what is the acid test for a good measurement model.

The tendency is many using a generic metric and assumes a one size fits all.

Different companies from different industries need different measurement as the proper yardstick simply because one needs to consider industry type and well as business life cycle.

You cant measure a start up the same way you measure a company that has reach the maturity stage… it’s just not an apple to apple comparison.

Cash is only as good as telling about the liquidity of the company. It’s not exactly a sign of telling how good the future performance is.

For one, the argument could be, there’s so much cash.. but not being able to utilise the cash in hand is simply not capital efficient from the shareholder perspective…

By: Lisa

Lisa — Mon, 22 Dec 2008 08:46:25 +0000

at time i really wonder how they derive their cashflow statements

By: fark.my

fark.my — Mon, 22 Dec 2008 08:08:30 +0000

How to Tell a Good Company from a Bad Company: CASH FLOW STATEMENT : Horizon.my…

If you are a business owner, you will agree that cash flow is king. Looking at earnings is only half the story. Too often we hear of companies making profits but in the end they still fail….