FOX Translator

Detach

No data currently available.

No data currently available.

TITLE

Free Cash Flow

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.

David Asman

David Asman

David Asman

David Asman joined FOX Business Network as an anchor in September 2007. He also serves as host of Forbes on Fox, a weekend half-hour program on FOX News Channel that offers an informative look at the week in business.

Asman has been with FNC since 1997 when he joined the network as a weekday anchor for Fox News Live. In 2005, he was named head of FNC's documentary unit where he hosted a series of investigative specials, including "Global Warming: The Debate Continues." He also hosted "U.N. Blood Money," a three- part series which examined the oil-for-food controversy, a story which he played a role in breaking.

Prior to joining FNC, Asman served as the Wall Street Journal's editorial features editor. He joined the newspaper in 1983 as an editorial writer, where he edited the Manager's Journal and the Americas columns, in addition to writing editorials and over 100 articles from Latin America and elsewhere. In 1994, Asman was named senior editor for the Journal's editorial page, where his role was combined with administrative responsibilities.

A recipient of the 1986 Inter American Press Association's (IAPA) Tom Wallace Award for coverage of Latin America in the Americas column, Asman also was editor of the book "The Wall Street Journal on Management: Adding Value Through Synergy" (Doubleday, 1990). In addition, he received the IAPA's 1992 & 1995 Daily Gleaner Award for his articles on free trade and Cuba and Mexico's economies.

Asman began his journalism career in 1978 as an assistant editor of Prospect Magazine and rose to executive editor within a year. In 1980, he was hired by George Gilder to start up an economic journal for the Manhattan Institute. Asman has also been a radio commentator for "Perspective on the Economy," and was a consultant to the Ford Foundation on African organizations in the United States. He also served as host of Issues USA, a nightly televised public affairs show.

What was your first job?
My first job EVER was a paper boy. My jobs through college all focused on restaurant work, where, at different times, I was a busboy, dish washer, cook, bartender and waiter. My first job after college was as a teacher at a junior high school. And my first steady job in journalism was writing for the Wall Street Journal.

Are you a spender or a saver?
With the exception of a mortgage, I've never had more debt than cash, so I guess I'm a saver. Now, my wife...

What was the one thing you regret buying?
All the "bargains" that I had to replace with quality items. The one thing I regret NOT buying is a car-I've always wanted one but never had one.

What was your biggest money indulgence?
A house on Cape Cod, which we really didn't "need," but which I've never regretted having bought.

What was the best money advice you received?
Best money advice relates to #3: Cheap is expensive-always pay a little more to get quality, and you won't waste money buying the same thing twice.

Market Snapshot

Symbol Last Price Netchange Volume
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --