They suggest redressing that, and offer counter-intuitive prescriptions that flow from that accounting change.
"This is a classic arbitrage between accounting and cash flow, " says Warburg Pincus Managing Director David Coulter.
Gas exploration companies like Chesapeake (CHK) or SandRidge (SD) have never been cash flow positive but often report positive accounting earnings.
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If Barack Obama ends M2M accounting, credit will flow once more, and the U.S. economy will recover in some fashion this year.
Even better is free cash flow, which helps avoid other accounting distortions.
Deep inside MCI's Ashburn, Va. headquarters, its walls are plastered with flow charts aimed at having hundreds of accounting tasks completed in time for its expected emergence from bankruptcy.
More to the point, the advocates of a new separate peace with Hanoi invariably contend that even greater cooperation on accounting for the missing will flow from normalizing trade relations.
The global public accounting firms have organization and process flow charts that describe governance structures and communications protocols within their global network structure.
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Our model, which tracks performance back to 1998, shows 2010 as the most profitable year ever in terms of accounting earnings, economic earnings, and free cash flow.
Consequently, it passed a law prohibiting auditors from prescribing any particular accounting treatment of the credit--thereby allowing companies to flow the credit through to earnings all at once or amortize it as they pleased.
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Much of the gas being produced, when you add in all the expenses including building gathering systems, purification plants, and accounting for the bad wells, lose money on a pure cash flow basis.
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Accounting ignores these critical details while finance incorporates them by using cash flow metrics rather than earnings metrics and a cost of capital measure that reflects current interest rates plus a component for a company's overall riskiness.
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