Brainy Brands Co's total free cash flow for the
six
months ended in Dec. 2010 was
$-0.73 Mil.
Brainy Brands Co does not have enough years/quarters to calculate the total free cash flow for the trailing twelve months (TTM) ended in Dec. 2010.
Brainy Brands Co's Free Cash Flow per Share for the
six
months ended in Dec. 2010 was $-0.02.
Brainy Brands Co does not have enough years/quarters to calculate the free cash flow per share for the trailing twelve months (TTM) ended in Dec. 2010.
The historical data trend for Brainy Brands Co's Free Cash Flow can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
Brainy Brands Co Free Cash Flow Chart
Brainy Brands Co Annual Data
Trend
Dec09
Dec10
Free Cash Flow
-0.19
-0.73
Brainy Brands Co Semi-Annual Data
Dec09
Dec10
Free Cash Flow
-0.19
-0.73
Brainy Brands Co Free Cash Flow Calculation
Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.
Brainy Brands Co's Free Cash Flow for the fiscal year that ended in Dec. 2010 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Brainy Brands Co (OTCPK:TBBC) Free Cash Flow Explanation
Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.
In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.
This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.
Brainy Brands Co Free Cash Flow Related Terms
Thank you for viewing the detailed overview of Brainy Brands Co's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.
Brainy Brands Co (Brainy Brands Co) Business Description
Brainy Brands Company Inc. was incorporated under the laws of the State of Delaware on November 21, 2007 and began activity in 2008.Previously, it was known as Enter Corp. The proposed business plan of the Company is to use innovative agricultural technology and know-how to grow vegetables and other crops, initially in the former Soviet Republic of Georgia, and later in other selected locations. The Company is in the development stage and has yet to realize revenues from operations. It intends to locate a local, joint venture partner to co-invest with them in its pilot project on a 30-hectare plot of land. If it does not locate a local, joint venture partner but do raise funds, it will execute the Pilot Project on its own. It initially intended to conduct a pilot project at a suitable location, which it has found in the town of Natakhtari in Georgia. Its President, Mr. Ayalon, has the experience of setting up farming operations in foreign countries and is capable of hiring local staff and managing them for its farming operations. Since the growing season starts in March in most regions of Georgia, it has missed the 2010 growing season. Hence, 2010 will be dedicated to building its infrastructure and locating the financing it require for its Pilot Project. It intends to advertise in local newspapers in Georgia in order to attract a possible local, joint venture partner. It intends to begin its Pilot Project operation in March 2011. It intends to bring Western know-how and precision farming techniques to its Georgian operations. Precision farming is based on proper soil analysis, proper seed choice, and the use of precise amounts of fertilizer, herbicides and pesticides. The use of drip irrigation plays an important role in precision farming by enabling the delivery of exact amounts of water and fertilizer. Additionally, the proper timing of planting, harvesting, fertilizer and pest control are all part of what is known as "precision farming techniques". Precision farming helps improve crop yields, because it is a scientific method that treats each crop individually. The Pilot Project's main focus is to prove its ability to produce vegetables for the local market. It hopes to locate a distributor that will supply its produce to local retailers and local wholesalers who will purchase its produce.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
TBBC has been successfully added to your