With non-GAAP presentations rampant, the importance of our making financial statement adjustments is a critical component of our analysis. The energy sector is far from alone in this regard. Classification error in the statement of cash flows, where firm leeway is often permissible under GAAP, requires such adjustments and results in large ranges in free cash flow estimates for analysts not making proper adjustments, such as leaving activities as financing or investment cash flows instead of movement to operating. The unadjusted analysis would result in incorrect conclusions of target price and risk.
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CT Capital
- CT Capital’s value-oriented investment strategy provides conservative portfolio management based upon the firm’s proprietary research methodology that quantitatively determines the attractiveness of a company based upon its free cash flow, credit analysis, and valuation characteristics.
