Free Cash Flow: The True Measure of Value
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Free Cash Flow: The True Measure of Value

What is Free Cash Flow? Free cash flow (FCF) is what Warren Buffett calls “owner earnings”. It is the amount of cash a company has left over after taking care of capital expenditures (CapEx) and working capital needs. Why Care About Free Cash Flow? Positive and growing free cash flow over a range of the…

7-Point Checklist for Picking Superior Long-Term Stocks

7-Point Checklist for Picking Superior Long-Term Stocks

Picking stocks of companies can seem like a daunting task. But it doesn’t have to be. Focusing on only a few of a company’s characteristics can narrow down the list of potentially good investments dramatically, and thereby significantly reduce the risk of stepping into potential investment land mines. The following 7-point checklist will help you…

Net Margin: a Measure of Accounting Profitability
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Net Margin: a Measure of Accounting Profitability

Net margin, also called net profit margin, is a measure of a company’s accounting profitability, i.e. profits reported on the income statement. Net margin compares a company’s net earnings, or net income, to its revenues or sales. How to Calculate Net Margin To calculate a company’s net margin, divide net earnings by sales. For example, Microsoft reported 2021 net earnings of $61.3…