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Tuesday, January 13, 2009
Year after year, the hedge fund industry dazzled Wall Street by delivering "absolute returns" - outsized profits whether markets rose or fell. Using sophisticated trading models, the pools of managed capital made wealthy people wealthier with eye-popping returns that carried seemingly moderate risk.
leaders before they were leaders
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Gourmet Gift Basket God
Mrs. Beasley CEO Ken Harris -
Honeybaked Ham Chief on Management
Kurz on running a business -
A Trillion Dollar Allowance
A Trillion Dollar Allowance -
Running an Airline With Spirit
Spirit Airlines CEO Ben Baldanza -
Not Playing Games
Not Playing Games -
Changing Lives One Laptop at a Time
Changing Lives One Laptop at a Time -
Rebuilding a Fashion Icon
Rebuilding a Fashion Icon -
Breaking Barriers
Goodwill CEO Jim Gibbons -
GM CEO Rick Wagoner
GM CEO Rick Wagoner -
Web Leader Sean Parker
Leaders before they were leaders -
Not Playing Games
Hasbro CEO Alfred Verrecchia -
Pretzel Proprietor
Auntie Anne's CEO Sam Beiler
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Southern Charm
Leaders: Southern Charm -
Best of Best
Best on business -
A Wealth of Knowledge
A wealth of knowledge -
A Handy Magician
Leaders: A Handy Magician -
A Long Reign
A Long Reign -
Edible Expansion
Edible Arrangements CEO on growing business. -
Working Together
SAP Americas CEO Bill McDermott -
Energy Futures
Leaders before they were leaders -
Eri Harari, SanDisk Founder and CEO
Eri Harari, SanDisk Founder and CEO -
Growing Flowers
1-800-Flowers CEO Jim McCann -
Leading Man
Tenet CEO Trevor Fetter -
Safety First
Mine Safety Appliances CEO John
fox business interviews
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Solutions For Retail
Innovative solutions for retailers. -
Geox Runs Past Competition
Geox Chairman on Geox's positive outlook. -
I Wanna Rock
Dee Snider on March of Dimes. -
Trump on Kennedy and Economy
Trump on Kennedy? -
Trump on Blagojevich Scandal
Trump on Gov. and Jackson Jr. -
Semiconductor Chips to Save Energy
Solving the energy crisis -
Trump, 'One of the Greatest Union Reps Ever'
Trump on the Auto Bailouts -
Trump on New Administration
Trump on Gov. Spending -
Behavior Marketing
Concentrating on existing customers. -
AFLAC's 2009 Outlook
AFLAC COO on its 2009 outlook
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Gourmet Gift Basket God
Mrs. Beasley CEO Ken Harris -
Flying High in Recession?
Chief Executive Air CEO Jeff Menaged. -
Pickens' Plan
Pickens on the progress of his plan. -
Trump on Madoff 'Ponzi' scheme
Why he didn't invest. -
New Energy Initiatives
Solving the energy crisis -
Keeping Brand Innovation
C-Suite: Utek CEO Clifford Gross -
Trump on Tax Increases
Donald Trump on Tax Hikes -
Ford CEO: We Are All in This Together
Alan Mullaly on auto bailout -
Southern Charm
Leaders: Southern Charm -
FBN Exclusive: TD Ameritrade Executives
The other side of the trade
FOX Translator
No data currently available.
No data currently available.
Just as your pulse is checked during a routine physical, free cash flow is used as an indicator of a company's health. It equals the cash brought in from operations minus the money needed to pay the bills. Think about leftover money in your checking account after you pay this month's bills.
Investors and analysts see this leftover money as a gauge of a company's ability to perform. It is available for transactions such as handing out dividends and working on new products.
Some argue free cash flow is wrongly overshadowed by the emphasis often placed on earnings. Earnings numbers can be manipulated and don't always tell the whole story -- and earnings don't mean much if there's nothing left over after a company pays its expenses. Even if you bring in a six-figure salary, but no money left after paying the bills, are you in great financial shape?
You don't have to be Einstein to figure out free cash flow. To calculate the number, subtract the company's expenditures and dividends from its operating cash flow.
If the free cash flow is written in red ink, it doesn't necessarily signal curtains. This is common for young companies looking to grow. It also could be a result of heavy investments, which in the long run could be worth a standing ovation.