Apologies in advance for a foolish question but I've been unable to find this answer. MF states in their December newsletter that the Owner Earnings Run rate for Quality Systems (QSII) is 20M. In the MF glossary, Owner Earnings Run Rate is: Net Income + Depreciation +/- One time Events - Capital Expenditures. If I look at the annual cash flow statement for QSII, I get Net Income [16.11] + Depreciation [1.01] +/- One time events  - Capital Expenditures [-4.38]. The result is 12.74 if I subtract the Capital expenditures..... However, since Capital Expenditures is negative, I wonder if I should add (double negative), instead of subtract to get 21.5. This value is much closer to the value in the December advisor issue. This isn't very intuative as I can't really think of a situation where capital expenditures would be positive...I am also making the assumption that the Value is from the latest annual Cash Flow statement. Thanks in advance for your clarification,Mark
I think that makes sense. Why don't you post this over on the board for QSII on the newsletter you're subscribed to. They can point you to the statements they used to come up with the number.
QSII is just an example, I'd welcome a clear answer on any stock.
Sorry I can't be more help, this isn't a metric that I use. My experience has been that the methods for calculating can seem arbitrary - the value is in the comparisons......
I am just bumping this thread because I am also interested in the answer. It is pretty important point as all the HG picks always show the Owner Earnings Run Rate.
Greetings,First, there are a slew of "Hidden Gems" boards at http://boards.fool.com/Boards.asp?fid=10080 that are for those that subscribe to that newsletter and may well have had this answered repeatedly over there. These boards, like those under the "Learning to Invest" folder, are the general ones that some of us access but don't subscribe to ANY of the newsletters.As for more of an answer, try these links:http://www.fool.com/news/commentary/2004/commentary04111701.htmhttp://www.fool.com/foolu/askfoolu/2003/askfoolu030619.htmhttp://www.fool.com/news/commentary/2004/commentary040421rm.htmhttp://www.buffettsecrets.com/owner-earnings.htmRegards,JB
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