The Cash Flow Growth Profile (TM): A Survey of Several Technology Industries

Abstract

The Cash Flow Growth ProfileTM measures the capacity of a firm to generate cash flow as it grows revenue. The metric is forward looking and reports the amount of incremental cash flow that can be expected for any measured amount of growth in revenue. In this report we examine the Cash Flow Growth ProfileTM of five technology industries, computer hardware, computer software, information technology services, telecommunications equipment, and semiconductors and related capital equipment. We look at trends in the Profile for eleven individual companies, two in each industry plus Microsoft Corp. In examining the Cash Flow Growth ProfileTM, the drivers or determinants of core operating cash flow and free cash flow are highlighted.

Data for this research were provided by Cash Flow Analytics, LLC. Charles Mulford is a principal in Cash Flow Analytics, LLC.