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.

Home / Markets / Industries / Energy

Monday, July 07, 2008

Standard & Poor's Announces Changes to U.S. Indices

Email this Story | Respond to Editor | Print

Comtex

NEW YORK, July 7, 2008 /PRNewswire via COMTEX/ ----Standard & Poor's will make the following changes to the S&P MidCap 400 and SmallCap 600 indices after the close of trading on Wednesday, July 9:

-- S&P SmallCap 600 constituent Helix Energy Solutions Group Inc. (NYSE: HLX) will replace Activision Inc. (Nasdaq: ATVI) in the S&P MidCap 400, and True Religion Apparel Inc. (Nasdaq: TRLG) will replace Helix Energy Solutions in the S&P SmallCap 600. Activision is undergoing a corporate restructuring that will leave it majority-controlled by S&P Global 1200 constituent Vivendi S.A. in a deal expected to close on or about that date, pending final approvals.

Standard & Poor's will monitor this transaction, and post any relevant updates on its website: www.standardandpoors.com.

Helix Energy Solutions provides subsea construction and maintenance services to the offshore energy industry, and also operates an exploration and production segment. Headquartered in Houston, TX, the company will be added to the S&P MidCap 400 GICS (Global Industry Classification Standard) Oil & Gas Equipment & Services Sub-Industry index.

True Religion designs, manufactures and markets clothing. Headquartered in Vernon, CA, the company will be added to the S&P SmallCap 600 GICS Apparel, Accessories & Luxury Goods Sub-Industry index.

 Following is a summary
   of the changes: S&P MIDCAP 400 INDEX - July 9, 2008 COMPANY GICS ECONOMIC SECTOR GICS SUB-INDUSTRY ADDED Helix Energy
   Solutions Energy Oil & Gas Equipment & Services DELETED Activision Information Home Entertainment Technology Software
   S&P SMALLCAP 600 INDEX - July 9, 2008 COMPANY GICS ECONOMIC SECTOR GICS SUB-INDUSTRY ADDED True Religion Apparel Consumer
   Apparel, Accessories Discretionary & Luxury Goods DELETED Helix Energy Solutions Energy Oil & Gas Equipment &
   Services

Additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the companies concerned.

About Standard & Poor's Index Services

Standard & Poor's Index Services, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Its family of indices includes the S&P 500, an index with $1.32 trillion invested and $4.91 trillion benchmarked, and the S&P Global 1200, a composite index comprised of seven regional and country headline indices. For more information, please visit www.standardandpoors.com/indices.

About Standard & Poor's

Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 23 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit: www. standardandpoors.com.

About The McGraw-Hill Companies:

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2007 were $6.8 billion. Additional information is available at http://www.mcgraw-hill.com.

SOURCE Standard & Poor's

http://www.standardandpoors.com

Copyright
   (C) 2008 PR Newswire. All rights reserved ********************************************************************** As of Thursday,
   07-03-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated an UPTREND on 04-04-2008
   for HLX @ $33.35. As of Thursday, 07-03-2008 23:59, the latest Comtex SmarTrend Alert, an automated pattern recognition system,
   indicated a DOWNTREND on 06-30-2008 for MHP @ $40.19. As of Thursday, 07-03-2008 23:59, the latest Comtex SmarTrend Alert,
   an automated pattern recognition system, indicated an UPTREND on 04-28-2008 for TRLG @ $17.38. For more information on SmarTrend,
   contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex News Network,
   Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights reserved.