The Lazy Girl's Guide to Cash Flow

Lazy about researching stocks you invest in? Me too, only worse. If I like the company name, or the product, or the industry (Yea, Solar!!! Go, baby, go!) I'll buy. I check out the stock's price history on yahoo, and maybe its price-earnings ratio and its dividend yield. If I have a couple of thou available and the stock price is cheap, I'll leap. This, as you can imagine, has led to some big embarassments, but never mind. Now, thanks to Bob Paretta (see previous post), I pledge that I will never ever ever buy a stock again without looking at the last three years' worth of net cash flow from operations (and in these times at the latest quarterly results, too). Turns out it's simple. Here's a step-by-step guide on how to do that.

1. Go to New York Times Business Page. In the right hand column, under the banner ad, is a section called "Markets.
2. In the box under "Get Quotes", enter the name or symbol of the company you want to look at, and press "go." Up comes a Times web page on your company.
3. Scroll down this page, and you will see, in the middle column, a heading called "Filings." Under this heading are the latest reports. 10-K is the most recent annual report. 10-Q is the latest quarterly report.
4. Click on the most recent 10-K report. This will automatically open up the report.
5. Go to Edit/"Find on this page" in the grey task bar on the top of the Internet Explorer window. Type in: "statement of cash flow" The cursor will take you to the first such mention in the document. Keep searching till you reach a table that shows the "consolidated statement of cash flows." Voila'! You've found it.
6. Just look at it -- 3 columns with the ins and outs of cash flows over the past 3 years. Relax, take a deep breath, maybe chant something like, "the 10-K is my friend." I guarantee that just looking at this table will help you make a decision about whether to buy or sell. (Whether it's a better decision is yours to find out. I certainly don't know.)

I'll let you know in an upcoming blog what I find out by doing this for Bank of America (symbol: BAC), and my home-town-upstate-NY love bug, Corning Class Works (GLW). Of course, Prof. Bob will be looking over my shoulder, I hope.