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Please Note: This is a sample research report and is updated periodically. This page was last updated on May 18, 2009.

• Economic Profit Research has found that earnings backed by significant cash flows tend to be more sustainable than non-cash earnings.
• To measure earnings quality, Economic Profit Research pays close attention to cash received as a result of the companies core business.
• Generally, cash flow from operations greater relative to operational income indicates good quality of earnings.
• Operational cash flow of $12,473.0M exceeds net income of $7,492.0M
• Operational cash flow is 1.7 times that of operating income.
• Operational cash flow increased 16.5% year over year to $12,473.0M in Q2 2008.

• In this chart, capital expenditures and accruals are compared to free cash flow.
• Economic Profit Research has shown that companies with high levels of accruals and high levels of free cash tend to outperform in the future.
• Accruals increased 88.8% year over year to $4,981.0M in Q2 2008.
• Capital expenditures have decreased by -2.5% over the last year while free cash flow has increased by 19.1%.
• Free cash increased 19.1% year over year to $11,211.0M in Q2 2008.
• This company is generating significant amounts of free cash flow and is clearly self-funding.

• This chart shows gross and operating margins along with free cash margin.
• Economic Profit Research believes that free cash flow of a company is a much better determinant of economic strength than net earnings.
• Currently, Cisco Systems, Incorporated is producing 28.3% of free cash flow from its revenues versus 18.9% of net income from revenues.

• Break even point in economics is the point at which cost and income are equal. It helps to provide a dynamic view of the relationships between sales, costs and profits.
• A better view is to see this analytical tool from a free cash perspective as a measure of a company's operating efficiency.
• Currently, CSCO has a free cashflow break even of 0.58 versus net income break even of 0.72.

• This chart shows the relationship between sales, total assets, total debt and total liabilities.
• Our research shows the higher these sales ratios the better.
• The sales growth rate for the trailing twelve months is 5.02%. A year ago the SL/TL ratio was 1.68 and today it is 1.61.

• This chart gives a general idea of a company's financial leverage.
• It measures a company's debt ratio, debt to equity ratio and capitalization ratio.
• The lower the ratio, the less leverage a company is using and the stronger its equity position.
• A year ago the TL/TA ratio was 0.41 and today it is 0.40. A year ago the capitalization ratio was 0.17 and today it is 0.15.

• This chart compares a company's cash flow to its total debt.
• It measures total debt and total liabilities to operational cash flow.
• These coverage ratios provide an indication of a company's ability to cover total debt with its yearly cash flow.
• The lower the ratio, the better the company's ability to carry its debt load.
• A year ago the TL/OC ratio was 2.10 and today it is 1.97.

• Interest coverage measures a company's ability to stay current with interest payment obligations.
• The lower the ratios, the more the company is burdened by debt expenses.
• A year ago the FC/Interest expense ratio was 25.10 and today it is 57.49.

• This chart shows if a company is earning both an accounting profit (ROE) and an economic profit (MAC Vc).
• Mac Vc is our proprietary metric used to determine if a company is currently adding to shareholder value.
• Mac Vc is Economic Profit Research's measure of Economic Return on Invested Capital.
• At Economic Profit Research, we believe the distinction between making an investment versus speculation is whether or not a company is creating shareholder value.
• The chart shows a positive trend to creating shareholder value.