Libs Posted April 8, 2015 Share Posted April 8, 2015 I've noticed cash flow from operations has gone up a lot. What about figuring out free cash flow? Does any one use this as a valuation tool? And am I calculating / thinking about this correctly? Here goes. (Cash flow statement on P. 51:) http://www.berkshirehathaway.com/2014ar/2014ar.pdf Cash flow from operations = $32 B in '14. ( Was $20.9 B just 2 years ago) Purchases of property, plant and Equipment = $15 B last year. Depreciation & amortization was $7.3 B. Let's say that Cap Ex was $8 B, and $7B was for growth. ( Shouldn't we factor in, positively, that $$ spent on Burlington are guaranteed a reasonable return by the regulators? How should I think about that in relation to this calculation?) Thus, free cash flow was something around 32-15+7 = $24 billion. (right?) Furthermore, this doesn't account for undistributed earnings from the equities. It may sound odd to add that to FCF, but then again Buffett used a look-through earnings calc in the past. This would push the number to 27-28 B. Market cap is $342 bilion or ~12.4X "free cash flow." Help :P Link to comment Share on other sites More sharing options...
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