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OklaBoston (68.30)

Another cash flow question

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November 26, 2009 – Comments (1)

    I notie that on many of the "Ratios" pages on this site companies are said to have negative free cash flows at the same time they have positive overall cash flows.

   Am I correct in interpreting this as meaning that such companies are fiscally healthy but unlikely to hike their cash dividends any time soon? 

1 Comments – Post Your Own

#1) On November 26, 2009 at 8:48 AM, rd80 (98.26) wrote:

Positive cash flow and negative free cash flow means the company spent more in capital expenditures than it had in cash flow.

You need to know more about the situation to assess the impact to the dividend.  Is the big capex a one-time investment or an ongoing project?  Did the capex expand production or cut costs to support higher cash flows going forward?

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