how do you factor in a company buying back shares? KO and MSFT do this all the time. I own both stocks (I'm concerned whether I should hold on to KO since their earnings and growth have been ahem less than stellar, there are other things such as their goodwill payments to CCE that are hurting earnings as well, but that is for the KO board).There are a couple of things you can consider when it comes to share buybacks. First, is the company actually buying back shares, or is it just trying to benefit its stock price by making a buyback announcement? You also should look at what's happening to the diluted share count. Companies that issue lots of options (Cisco is a great example here) buy back tons of shares to cover their option overhang. But, the share count doesn't go down all that much. So, what's really happening is that they're transferring money to their employees in the form of share buybacks. You can check the investing section of the cash flow statement for some info on share buybacks. For example, in its most recent 10Q, Cisco shows that it used 3,001 million of cash to buyback shares and received 96 million from stock issuance. Additional information on buyback activity can be found in the Statement of Shareholders' Equity. I'm happy to discuss this more if you have further questions.As for Coke and its payments to bottlers, be careful about that. Coke and its bottlers are related parties. There are still some shenanigans that can be played with those payments. (See: Accounting at Coke http://www.fool.com/CashKing/1998/CashKingPort981008.htm).The lack of fair value information in financial statements does mean that the intangibles are not fully reflected on the balance sheet. In the case of a company like Coke, they can have significant value.I probably won't be posting again until after Thanksgiving. I hope that everyone has a good holiday.Phil
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