专业期刊《分析师会计观察》（The Analyst's Accounting Observer）因为巧妙地阐述会计问题而得到资产管理公司经理人的赞誉。这份刊物的出版人杰克•切谢尔斯基为公司盈利能力制定了一个全新指标。他的目标是让人们清楚地看到经营者在运用股东托付的资金进行投资时所取得的成功。切谢尔斯基把这个指标称为“COROA”，意思是资产的现金经营回报率（cash operating return on assets）。他的想法是衡量管理层向工厂、研发中心、库存以及其他所有资产投入的全部资金产生纯现金回报的能力，而不是对今后所得现金的预期。2月份，切谢尔斯基在第25期《分析师会计观察》中写道：“投资者用公司产生现金的能力和投入到该公司的资金进行比较是合理行为。”对他来说，现金就是一切。他问道：“世界上还有什么比现金更重要？嗯？当然有，那就是更多的现金。”
A big challenge for investors is piercing management's feel-good, "it's all great if you leave out the bad stuff" earnings metrics to measure a company's true profitability. Even the official GAAP accounting numbers frequently need plenty of scrubbing to reveal the real picture. For example, many companies claim victory by boasting that their ratio of net profits to shareholders' equity is a big number. Investor beware: Management can hike "return on equity" by piling on debt, and high leverage makes the player riskier, not better. Another tactic, now in vogue, is moving factories that make the most profitable products to low-tax nations where the taxes may not remain low for long. That tax arbitrage provides a one- or two-time boost in earnings, but doesn't prove management is running the basic businesses any better.
So what's the best, gimmick-proof way to measure how profitable companies really are? Answering that question gets to Warren Buffett's view of investing: Finding companies that consistently generate big returns on capital -- not only on the capital they manage now, but the fresh earnings that flow in each year. New investments that compound at double-digit rates are the ticket to fabulous performance for shareholders.
Jack Ciesielski, author of The Analyst's Accounting Observer, a newsletter prized by asset managers that skillfully demystifies accounting issues, has developed a fresh measure of profitability. His goal is to provide a clear view of managers' success in investing the capital entrusted to them by shareholders. He calls it "COROA," for cash operating return on assets. The idea is to measure management's ability to generate pure cash returns, not cash expected in the future, on every dollar invested in plants, R&D centers, inventories, and all other assets. "It makes sense for an investor to look at a firm's cash generation ability, relative to the cash invested it," Ciesielski wrote in the Feb. 25 edition of his newsletter, "The Analyst's Accounting Observer." For Ciesielski, it's all about cash. "What's more important in the world than cash?" he asks. "Why, it's more cash, of course."
The first step is ascertaining true operating cash flows, meaning every dollar collected during the fiscal year. That's not the number on the cash flow statement titled "cash flow from operating activities." For Ciesielski, two factors distort that figure, making it an unreliable measure of true performance. First, official cash flow is calculated after cash income taxes, so that falling taxes can create the illusion of ongoing progress. Second, interest is also subtracted, and the size of the annual interest levy reflects the level of leverage, but has nothing to do with how well management is managing their assets.
Hence, Ciesielski advocates adding back cash taxes and cash interest to calculate pure operating cash flows. Once again, that's the dollar amount that the company actually puts in its coffers during the year. Those are the dollars that management has available to pay dividends, buy back stock, make "investments" by purchasing companies or divisions, and funding capital expenditures, especially those that propel growth. That's the numerator.
The denominator consists of every dollar spent on the assets that produce those operating cash flows. To calculate that figure, take "total assets" from the balance sheet, and add "accumulated depreciation" to account for the plants or fabs still making cars or semiconductors that, for accounting purposes, are fully expensed. Fortunately, cash taxes, cash interest, and accumulated depreciation must be reported each year in the 10K, and loads of new information is just now being filed. For large companies, the deadline for 10K filings was March 4. So that investors can perform extremely up-to-date analysis.