By Brian Tay White
Free cash flow is important because it allows a company to acquire assets, to pay dividends and to reduce its debt. If the free cash flow is negative, meaning the capital expenditures exceeds the operating cash flow, this doesn't mean that the company is in bad terms. But we should remember in the long run the company can benefit from it. When a company earns a profit that is divided among its shareholders in the form of what is called dividends.
These are part of operating cash flow. If you want to know the income structure of your investment, you can make use of a dividend tracker to help you to keep track of your paid dividends. This will be a useful guide for you as an investor. Companies that offer such dividends are the ones that have reached its financial growth and choose to pay dividend to its shareholders rather than reinvesting its profit. With the use of a dividend tracker, you can keep track of the records of reinvested dividends that you are receiving.
On the other hand if you want to buy and trade stocks, you can trade it on the stock market. A dividend tracker will be very useful for you to track the list of stocks that are listed in the stock exchange market. Finding the right investment holding company (like the Singapore Stock Exchange) that has many services to offer like those related to securities and other trading of stocks concerned is a good choice. The latest prices of stocks that are traded are on the Singapore Stock Exchange will help you a lot when it comes to your investments.
The questions you need to answer:
a) Why you should use free cash flow to measure a company's financial performance
b) Why you should keep track of all the data of your paid dividends and the list of stocks that are listed in the stock market.
The answer is simple. If you are a wise investor, before you go investing in any kind of company or stock, be sure that you are really ready and interested in investing in the stock market. You must realize the compounding effect of the dividends you earned in your income portfolio.
Think wisely, so that your choices give you a good return of investment. Having a good plan you are on the way of becoming a successful investor in the future. After all they say that life is what we make it. So discover how these investments could last you a lifetime.
Brian Tay White is a professional equity research analyst in one of Asia's largest investment banks. During his free time, he holds seminars and workshops on stock market investing based on value investing strategies so that they too can be financially free. To find out more on how you can invest in the stock market like Warren Buffett, visit his blog at http://www.stockmarketinvesting101.com. You can also download a free report on '7 Secrets I Learned from Warren Buffett That Generated Me 100% Return on Investments...while SLEEPING!'
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