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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Friday, August 29, 2008

TV Convention Ratings Up from 2004

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Associated Press

NEW YORK--Interest in the Democratic convention among television viewers continues to run well ahead of 2004, although vice presidential candidate Joe Biden was a slightly less potent draw than Hillary Clinton.

CNN was also claiming a milestone in the network's history, beating ABC and CBS in head-to-head competition and running in stride with NBC on Wednesday. In nearly three decades, CNN has never beat all three broadcast networks in viewership when competing directly.

An estimated 24 million people watched the convention Wednesday between 10 to 11 p.m. on ABC, CBS, NBC, CNN, Fox News Channel, MSNBC, BET and TV One, according to Nielsen Media Research. Viewership on Tuesday, when Clinton spoke, was just under 26 million.

Those numbers don't include commercial-free PBS, which estimates it had 3 million convention viewers on Wednesday, or C-SPAN.

The third day of the 2004 convention, where John Kerry was nominated, had nearly 18 million viewers. Day two that year, which was not shown by the broadcasters, had 5.9 million.

This year on Wednesday, CNN had 5.38 million viewers from 10 to 11 p.m. ET, while NBC had 5.36 million, ABC had 3.48 million, CBS had 3.46 million, Fox had 2.7 million and MSNBC had 2.3 million, Nielsen said.

Yet NBC was actually on the air covering the convention until 11:03 p.m., and when those extra three minutes are added in, its average reaches 5.46 million. Nielsen is unable to break down CNN's viewership for those three minutes, so the true victor remains unclear. CNN was second to NBC on Monday and Tuesday.

"It is extraordinary for us to beat the broadcast networks," said Jon Klein, CNN U.S. president. "This signifies what people have known all along about where to get news."

Four years ago Fox News Channel beat the broadcast networks for each night of the Republican convention that nominated President Bush for a second term.

Fox's achievement in 2004 was chalked up to politics by some, since the network is watched by more Republicans than Democrats. Klein said he didn't believe politics was key to CNN's victory, even though a Pew Research Center study released this month found that 51% of CNN viewers identify themselves as Democrats and 18% as Republicans.

Klein noted that more Americans call themselves Democrats than Republicans. The same Pew study found that CNN was most trusted as a reliable news source, he said.

"That's the bottom line for a news organization," he said.

It's been an eventful convention for MSNBC, which has attracted as much attention for the on-air bickering of its personalities as its coverage.

At one point when Joe Scarborough was discussing positive developments in John McCain's campaign, Keith Olbermann was heard on an offstage microphone saying: "Jesus, Joe, why don't you get a shovel?"

Olbermann also appeared to anger co-anchor Chris Matthews by apologizing to a guest for having to wait through on-air analysis of Clinton's speech. Olbermann made an open-and-shut motion with his hand imitating a yapping mouth.

"You make that sound, Keith," Matthews said. "I can do the same to you. That's what I thought, all right? And I said it."