{"id":1902,"date":"2010-09-23T20:37:02","date_gmt":"2010-09-24T00:37:02","guid":{"rendered":"http:\/\/www.credittrends.com\/blog\/?p=1902"},"modified":"2010-09-24T13:22:24","modified_gmt":"2010-09-24T17:22:24","slug":"adobe-systems-adbe-announcement-would-not-have-fooled-cash-flow-and-credit-analyst","status":"publish","type":"post","link":"https:\/\/www.credittrends.com\/blog\/2010\/09\/23\/adobe-systems-adbe-announcement-would-not-have-fooled-cash-flow-and-credit-analyst\/","title":{"rendered":"Adobe Systems (ADBE) Announcement Would Not Have Fooled Cash Flow and Credit Analyst"},"content":{"rendered":"<p>The news of Adobe Systems (<a href=\"http:\/\/seekingalpha.com\/symbol\/adbe?source=search_general&amp;s=adbe\">ADBE<\/a>) yesterday would have not surprised the serious student of cash flow and cost of capital.<\/p>\n<p style=\"text-align: center;\">\n<p><!--more-->In its June <a href=\"http:\/\/www.sec.gov\/Archives\/edgar\/data\/796343\/000079634310000011\/form_10q.htm\">10-Q<\/a>, for which the firm consolidates 6 months of activity, despite showing rising net (GAAP) income, when backing out ADBE\u2019s first quarter, it is apparent both cash flow from operations and free cash flow weakened considerably.<\/p>\n<p>In addition, according to <a href=\"http:\/\/www.credittrends.com\/blog\/ct-capital-llc\/\">CT Capital\u2019s <\/a>research, ADBE displayed, prior to the most recent announcement:<\/p>\n<ul>\n<li>Debt that has continued to build<\/li>\n<li>Financial flexibility has been compromised<\/li>\n<li>Operating leases continue to grow at a rapid rate<\/li>\n<li>Low and volatile tax rate, both effective and\u00a0 actual<\/li>\n<li>Deterioration in working capital to total debt<\/li>\n<li>Significant acquisitions<\/li>\n<li>Decrease in order backlog<\/li>\n<li>Poor reinvestment rate<\/li>\n<li>Weakening productivity<\/li>\n<\/ul>\n<p>Related articles:<\/p>\n<ul>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/09\/13\/new-age-security-analysis\/\">New Age Security Analysis<\/a><\/li>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/09\/07\/hewlett-packard-hpq-and-lexmark-lxk%e2%80%94cost-of-capital-key-to-forecasting-stock-price\/\">Hewlett-Packard (HPQ) and Lexmark (LXK)\u2014Cost of Capital Key to Forecasting Stock Price<\/a><\/li>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/08\/09\/the-best-indicator-of-future-stocks-prices-over-last-10-years\/\">The Best Indicator of Future Stock Prices Over Last 10 Years<\/a><\/li>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/07\/16\/now-you-see-why-the-cost-of-equity-capital-is-so-important\/\">Now You See Why The Cost of Equity Capital is So Important<\/a><\/li>\n<li><a href=\"http:\/\/www.credittrends.com\/blog\/2010\/06\/08\/use-roic-not-ebitda-for-superior-performance\/\">Use ROIC, Not EBITDA for Superior Performance<\/a><\/li>\n<\/ul>\n<p>Disclosure: No positions<\/p>\n<p><a href=\"http:\/\/www.credittrends.com\/blog\/about\/\">Kenneth S. Hackel<\/a>, CFA<br \/>\nPresident<br \/>\n<a href=\"http:\/\/www.credittrends.com\/blog\/ct-capital-llc\/\">CT Capital LLC<\/a><\/p>\n<p><a href=\"http:\/\/www.credittrends.com\/blog\/contact-us\/\">Contact Us<\/a><\/p>\n<p><a href=\"http:\/\/feedburner.google.com\/fb\/a\/mailverify?uri=CreditTrends&amp;loc=en_US\">Subscribe to CreditTrends.com by Email<\/a><\/p>\n<p><a href=\"http:\/\/www.amazon.com\/gp\/product\/0071744355?ie=UTF8&amp;tag=credtren-20&amp;linkCode=shr&amp;camp=213733&amp;adid=0VR08J2ZHP6QA42KSCDA&amp;creative=393185&amp;creativeASIN=0071744355\"><img loading=\"lazy\" decoding=\"async\" title=\"Security Valuation and Risk Analysis: Assessing Value in Investment Decision-Making\" data-src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/uploads\/2010\/07\/Kens-Book4.jpg\" alt=\"\" width=\"96\" height=\"136\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" style=\"--smush-placeholder-width: 96px; --smush-placeholder-aspect-ratio: 96\/136;\" \/><noscript><img loading=\"lazy\" decoding=\"async\" title=\"Security Valuation and Risk Analysis: Assessing Value in Investment Decision-Making\" src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/uploads\/2010\/07\/Kens-Book4.jpg\" alt=\"\" width=\"96\" height=\"136\" \/><\/noscript> <\/a><\/p>\n<p>If you are interested in learning\u00a0more about cash flow, financial structure and valuation, order \u201c<a href=\"http:\/\/www.amazon.com\/gp\/product\/0071744355?ie=UTF8&amp;tag=credtren-20&amp;linkCode=shr&amp;camp=213733&amp;adid=0VR08J2ZHP6QA42KSCDA&amp;creative=393185&amp;creativeASIN=0071744355\">Security Valuation and Risk Analysis<\/a>\u201d out this fall from McGraw-Hill.<\/p>\n<p class=\"facebook\"><a href=\"http:\/\/www.facebook.com\/share.php?u=https:\/\/www.credittrends.com\/blog\/2010\/09\/23\/adobe-systems-adbe-announcement-would-not-have-fooled-cash-flow-and-credit-analyst\/\" target=\"_blank\" title=\"Share on Facebook\">Share on Facebook<\/a><\/p><div class=\"tweetthis\" style=\"text-align:left;\"><p> <a class=\"tt\" href=\"http:\/\/twitter.com\/home\/?status=Adobe+Systems+%28ADBE%29+Announcement+Would+Not+Have+Fooled+Cash+Flow+and+Credit+Analyst+https%3A%2F%2Fwww.credittrends.com%2Fblog%2F%3Fp%3D1902\" title=\"Post to Twitter\"><img decoding=\"async\" class=\"nothumb lazyload\" data-src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/plugins\/tweet-this\/icons\/en\/twitter\/tt-twitter.png\" alt=\"Post to Twitter\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" \/><noscript><img decoding=\"async\" class=\"nothumb\" src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/plugins\/tweet-this\/icons\/en\/twitter\/tt-twitter.png\" alt=\"Post to Twitter\" \/><\/noscript><\/a> <a class=\"tt\" href=\"http:\/\/twitter.com\/home\/?status=Adobe+Systems+%28ADBE%29+Announcement+Would+Not+Have+Fooled+Cash+Flow+and+Credit+Analyst+https%3A%2F%2Fwww.credittrends.com%2Fblog%2F%3Fp%3D1902\" title=\"Post to Twitter\">Tweet This Post<\/a><\/p><\/div><!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>The news of Adobe Systems (ADBE) yesterday would have not surprised the serious student of cash flow and cost of capital. Share on Facebook Tweet This Post<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n<p class=\"facebook\"><a href=\"http:\/\/www.facebook.com\/share.php?u=https:\/\/www.credittrends.com\/blog\/2010\/09\/23\/adobe-systems-adbe-announcement-would-not-have-fooled-cash-flow-and-credit-analyst\/\" target=\"_blank\" title=\"Share on Facebook\">Share on Facebook<\/a><\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[338],"class_list":["post-1902","post","type-post","status-publish","format-standard","hentry","category-general","tag-adbe"],"_links":{"self":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/1902","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/comments?post=1902"}],"version-history":[{"count":1,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/1902\/revisions"}],"predecessor-version":[{"id":1914,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/1902\/revisions\/1914"}],"wp:attachment":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/media?parent=1902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/categories?post=1902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/tags?post=1902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}