FOX Translator
No data currently available.
No data currently available.
TITLE
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 / Finance
Friday, May 09, 2008
Citi To Shed About $100 Billion In Noncore Businesses
Greg Morcroft
MarketWatch Pulse
NEW YORK -- Citigroup said Friday that it well sell about $100 billion of noncore operations as part of its overall plan to slash about half a trillion dollars of assets from its balance sheet. The rest of the elimination will come from either selling or holding to maturity, about $400 billion of low return or mark to market assets. Citi's CFO Gary Crittenden said it would take about 3 years to run off and sell the assets, and that the divestitures would generate more than $40 billion of new incremental capital, above its current Tier 1 capital ratio of about 8.8% at the end of the first quarter. Citi said all of the legacy asset wind down would come the securities and banking businesses, excluding alternative investment businesses. It said more than 50% of the reduction would come in its consumer banking business, primarily in the form of sales or runoffs of mortgage and mortgage-related securities.
Copyright © 2008 MarketWatch, Inc.
Market Snapshot
| Symbol | Last Price | Netchange | Volume |
|---|---|---|---|
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
| -- | -- | -- | -- |
