Jeff Bezos: Investors Should Focus On Free Cash Flow, Not Earnings | Value Investing News

Jeff Bezos: Investors Should Focus On Free Cash Flow, Not Earnings

  • The simple answer is that earnings don’t directly translate into cash flows, and shares are worth only the present value of their future cash flows, not the present value of their future earnings.
  • Here are the income statements for the first four years of business:It’s impressive: 100% compound earnings growth and $150 million of cumulative earnings.
  • Over the same four years, the transportation business generates cumulative negative free cash flow of $530 million.
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