Last year earnings per share rose 19%, while cash flow from operations declined 10%.
Also, cash flow from operations for the most recent fiscal year must also be positive.
CEOs and the boards of mid-market companies deal with negative cash flow from operations in numerous ways.
Half of Microsoft's cash flow from operations is dedicated to share repurchases to counter the dilution from options.
The computers compare net income with cash flow from operations and the cash level on the balance sheet.
Result: Cash flow from operations went down 30%, despite earnings growth of 14%.
Also steer away from roll-ups that have negative cash flow from operations.
You get that number by taking the "cash flow from operations" reported on the "consolidated statement of cash flows, " then subtracting capital expenditures.
Besides slicing and dicing business segment information, Axa Rosenberg's model looks at each company's overall balance sheet, cash flow from operations and net income.
Rising revenues are nice, but big gains in operating income (net income before depreciation, interest and taxes) and cash flow from operations are even better.
Another straw in the wind: weak free cash flow from operations.
He notes that in 10 of 14 quarters since 2006 SunPower's cash flow from operations has lagged net income, making him wonder where the cash is.
Schostak notes that cash flow from operations has been about break even over the last few quarters, although it was likely negative in the March quarter.
If Chesapeake really is serious about increasing shareholder value, they are going to have to use free cash flow from operations to reduce their debt load.
Growth of free cash flow (cash flow from operations minus capital expenditures) is slowing and actually fell 29% in the last quarter compared with a year earlier.
Seagate said it will fund the dividend and share repurchases through a combination of cash on hand, future cash flow from operations and potential alternative sources of financing.
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But he also notes that the stock trades at 10.7x estimated FY 2013 cash flow from operations, vs. peers at 12.7x and on demand software players at 23.1x.
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Despite the highly negative market reaction to earnings, Apple actually managed to increased its cash flow from operations by more than 33% over the same period last year.
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Roughly speaking, cash flow from operations is defined as net income plus depreciation, plus decreases in receivables and inventory, plus increases in accounts payable and deferred taxes payable.
Also, the company turned cash flow (from operations) positive in the fourth quarter of 2004.
In fact, Chief Financial Officer Russell Ball indicated that with planned dividend payouts, debt payments, operating expenses, capital expenditures and lower cash flow from Batu Hijau operations in Indonesia, the company will spend more than it earns through 2013, but then this is expected to reverse.
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Instead he uses a multiple of free cash flow (here defined as cash from operations minus capital spending, but adding back proceeds from selling assets such as equipment-which United does regularly).
It pays dividends out of a flow of cash called "funds from operations"--essentially, net income with depreciation added back in.
This is why I want cash from operations (CFO), which is located on the cash flow statement, to routinely be positive.
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