Aggressive accounting methods can make a company's growth appear much better than it really is. Some firms might recognize revenues before receiving cash proceeds, for example, while others might capitalize expenses instead of charging them against earnings.
Starbucks' profits, on the other hand, are real. A comparison of the company's net income with its total cash flows (both of which can be found in the Financials section of a stock's Morningstar Quicktake Report) shows that the two have been pretty much in line in each of the past three years. In fact, the company's cash flows have been about twice its net earnings. Starbucks is really making money.
Has Growth Hurt the Balance Sheet? >>