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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.

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Staying on the Sidelines May Boost Strahan's Appeal

 
Matt Egan
FOXBusiness
 

By turning down a chance to return to the National Football League with the defending Super Bowl champs, star Michael Strahan guaranteed he'll walk away at the top of his sport, a move experts say will only add to his already impressive marketability.

“I think he made the right decision at the right time and he’s got huge opportunities, not only from a broadcast perspective but from a marketing perspective,” said Mike Paul, a friend of Strahan’s and president and senior counselor of public-relations firm MGP & Associates PR.

Instead of returning to his spot on the New York Giants’ defensive line, Strahan will stick to his new role as an NFL studio analyst at FOX Sports. FOX Business and FOX Sports are both owned by News Corp. (NWS)

His job as a football analyst will add to his already lengthy resume of television appearances, which includes appearing in commercials for Sony's (SNE) PSP video-game player, Subway, Snickers, Right Guard deodorant and Yum! Brands Inc.'s (YUM) Pizza Hut. Strahan also appeared on the cover of the now-defunct NFL Blitz video game in 2003 and co-wrote a 2007 autobiography titled Inside the Helmet: Life as a Sunday Afternoon Warrior. 

Television networks were falling over themselves to land Strahan, who's known for his gregarious personality and toothy smile, during the offseason. FOX beat out Disney’s (DIS) ESPN and other networks to secure his services with a deal reportedly valued at $2.3 million over four years. 

A sudden season-ending injury to Giants defensive end Osi Umenyiora nearly put a wrench in those plans, sparking serious consideration on Strahan's part about returning to the game.

"This has been one of the toughest nights of my life," Strahan told FoxSports.com on Tuesday. "But after long deliberation and throwing around a million scenarios in my head for the past day, I think it's just best if I stay retired." 

It's not clear what the Giants were offering Strahan, but it's safe to say it was significantly more than what his contract with FOX Sports calls for. 

While Giants fans may lament what could have been, marketing experts said Strahan has little to gain from pulling a Brett Favre.

“I don’t know if he’d enhance [his marketability] anymore by going back. As far as his own image or his standing among today’s players, I don’t know that he has a whole lot to gain” from returning, said Darin David, an 18-year sports marketing veteran and director of Millsport in Dallas, Texas.

Strahan also needed to factor in his chance to leave the game in a strong position: he was still one of the NFL’s most elite players, and his health hadn’t forced him into retirement.

"The position of going out on top is certainly going to add dollars" to his marketing value, said Paul.

It’s unusual that Strahan has been able to capitalize on his NFL accomplishments to this extent, even though he wasn't a quarterback or running back, the positions that tend to receive most of the headlines.

“Strahan has been the main guy that’s been able to go from the defensive side of the ball and make the jump into broadcasting,” said David. “He was probably the most respected defensive player in the league... Everybody knew he would go right into broadcasting, because he’s really likeable and recognizable."

Aside from the marketing considerations, Paul said the FOX Sports contract may have really been what held him back from making the triumphant return.

“I believe if it was easy for him to get out of that contract, he would think very seriously about coming back to help his team,” said Paul.

No matter the reason behind the decision, it appears that Strahan will be watching the next Giants game off the field, and probably in front of a camera. 

 
 

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