Finding the numbers

[django]

Thanks Pat, I think that makes complete sense. So the newest list above seems to be the correct way to gather the numbers from Advfn. That was the hardest part for me; figuring out specifically where to find the numbers... Because, as much as I love Phil's book, he was a little vague on where exactly to find the numbers. I do plan on using Investool after I get started papertrading. So does everyone agree that I'm pulling these from the right places?

[rharmelink]

Pat,

The numbers from AdvFN:

> net cash from continuing operations = 2,009.90
> purchase of property, plant & equipment = -338.3

They add up to the 1671.60 you mention. AdvFN also has:

> acquisitions = -2,732.20

Adding that as well would give you the -1,060.60 that MSN has, so that's the amount they are including that Rule#1 doesn't want.

However, I note that AdvFN also has:

> sale of property, plant & equipment = 28.3

Seems to me that if you include the purchase cost of property, plant and equipment, you should also include the sale of same. It may not make a big difference here, but it may elsewhere?

Also, I do get the 1656 number if I include this financing activity listed on AdvFN's Cash Flow statement:

> other investing changes, net = -14.7

...but what's in that category may differ quite a bit from company to company, so I'm not sure it would make sense to include it.

[django]

You're right, maybe we should also add the sale of property...
hmmm. It does make sense. Or at least we should be aware of that line in case it is a big number.

[ApexAZ]

I don't think the sale of property/equipment should be a factor.

I'd rather focus on their main stream of income. I would hate to be thrown off due a once in 10 year sale that boosted their cashflow by 10% or something, you know?

On the flipside, if a company is buying stuff, which most should be to continue growing, I want to know how they are managing that cashflow.

[rharmelink]

How about this analogy...

You buy a new $60,000 car but you sell your old one for $30,000 because you don't need it any more.

How is your cash flow affected? -$60,000 or -$30,000?

There may be times when a company is selling off, liquidating, or salvaging their old assets when buying new ones -- trading up.

It makes a big difference on something like IBM:

period ending                               2001/12	  2002/12	  2003/12	  2004/12	  2005/12
sale of property, plant & equipment	     1,165.00	 2,008.00	 1,136.00	 1,336.00	 2,039.00
purchase of property, plant & equipment	-5,660.00	-4,753.00	-4,393.00	-4,368.00	-3,842.00

[django]

Does anyone know how to deal with "intangibles" and "goodwill" when calculating the equity numbers?

Phil has a whole blog entry about it but I was wondering if anyone knows the specific math and the actual line items to use?

http://philtown.typepad.com/phil_tow...ible.html#more

[rharmelink]

When you get into the area of intangibles and goodwill, you're getting into a level of detail where you need to go back to the SEC filings to figure out just what is what. You have to keep in mind that the "line items" you are getting from the on-line services are just an interpretation and grouping of data from the SEC filings -- they "squeeze" the unusual data into the pigeonholes they have for the data. Sometimes differently.

For example, you'll find differences between services (e.g. Yahoo, MSN) even looking at something as apparently simple as "Cash & Equivalents".

[patfergie44]

rharmelink,

Regarding cash flow, I certainly agree with your logic and you're probably correct that we should add in the "sale of property, plant and equipment." However, what I do know is that Phil uses Investools and I'm assuming there is a line that calculates the Free Cash Flow for him without adding or subtracting any numbers. All he states on his blog is to take "net cash from continuing operations" and subtract out the "purchase of property, plant & equipment". I checked some of Justin's homework examples and by doing this, the MSN spreadsheet calculates almost exactly to Investools (there are just a few times that it is off but when I add/subtract either of the two other items - "sale of property, plant & equipment" or "other investing changes" - it won't come up to what Justin has anyway). This is probably something that should be brought up on Phil's blog to get his insight into what lines we should be pulling from. For now, I'm going to stick with what we have unless I see/hear something more from Phil.

[django]

thanks for doing the math on that one, pat. I'd like to see what Phil says about this. Do all of my other numbers look like thay are coming from the right places?

[patfergie44]

Hey django,

I definitely plan to look at the advfn numbers and see if they look right. At presnt, my computer is sick and I've had to resort to my PDA or to hotel computers. I'm hoping to check those numbers out this weekend if I can get a computer up and running.