Content about Cash flow

January 26, 2011

The Motley Fool on Tuesday suggested all three national pureplay drug chains were in a better position today than five years and three years ago based on a metric called the “cash king margin.”

NEW YORK — The Motley Fool on Tuesday suggested all three national pureplay drug chains were in a better position today than five years and three years ago based on a metric called the “cash king margin.”

The metric teases out the amount of free cash flow a company actually can use to monetize shareholder value by paying dividends or buying back stocks. Companies that can create cash king margins (calculated by dividing free cash flow by sales) of more than 10% are the most attractive to investors, the Fool surmised.