TSXV:AUN.H - Post by User
Comment by
JonEcashon Oct 26, 2007 12:37pm
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Post# 13697722
RE: Cash flow correction
RE: Cash flow correctionActually, I too am an accountant and need to further clarify fguide's post. Benton was quite correct. A cash flow statement is made up of 3 parts, cash flows from or used in:
1) operating activities
2) financing activities
3) investing activities
So when you do a multiple on a mine production company's cash flow, you would do so on its cash flow from OPERATIONS (#1 above). An acquisition would be included as a cash outflow in the INVESTING activities (#3 above), and therefore would be excluded from the operational cash flow multiple. This is especially true since such an investment is usually a one-time occurrence and shouldn't affect one's valuation assessment of how profitable the La Negra operation is. I hope that is clear.
J$