Course 404: Aggressive-Growth Stocks
Are Free Cash Flows Positive or Negative?
In this course
1 Introduction
2 Is Cash Flow in Line with Earnings?
3 Has Growth Hurt the Balance Sheet?
4 What Are the Trends in Growth Rates?
5 How Consistent Is the Company's Growth?
6 Are Free Cash Flows Positive or Negative?
7 How Much Does the Company Earn on Its Capital?
8 How Has the Stock Performed?
9 How Expensive Is It?
10 How Does the PEG Ratio Compare with Those of Similar Firms?
11 Conclusion: Knowing the Odds

Ideally, we'd like to see positive free cash flow (cash flow minus capital spending). But Starbucks plows all of its available cash flow into expansion, and then some. The company's free cash flow has been sharply negative, though it did become less negative in 1998 and 1999. To bridge the gap between cash flow and spending, Starbucks burns through external capital at a rapid clip, repeatedly issuing stock and taking on debt.

Next: How Much Does the Company Earn on Its Capital? >>


Search
Print Lesson |Feedback
Del.icio.us Del.icio.us | Digg! digg it
Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.
Copyright 2015 Morningstar, Inc. All rights reserved. Please read our Privacy Policy.
If you have questions or comments please contact Morningstar.