In his now famous presentation, Einhorn broke down the case for shorting Green Mountain Coffee: the company had very low operating cash flow and negative free cash flow that was getting more negative.
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Consider: Since March of 2001 Cytyc's free cash flow (operating cash flow less spending on property, plant and equipment) has increased from 26 cents per share to 83 cents per share.
We define free cash flow as net cash provided by operating activities less capital expenditures.
Free cash flow is calculated as GAAP net cash provided by operating activities less purchases of property and equipment and intangible assets.
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The last metric, known by some as free cash flow, is calculated by subtracting dividends and capital expenditures from operating cash flow.
Fitch said Nokia needs to stabilize revenues and be capable of generating low-single digit non-IFRS operating profit margins and positive pre-dividend free cash flow, if it is to affirm the current rating.
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Analysis of free cash flow also facilitates management's comparisons of our operating results to competitors' operating results.
To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP EPS, free cash flow, and non-GAAP international revenues.
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