First Reviews of Book

Below are the first reviews on the book I have seen. They are on the book’s page on Amazon.com. If you see other reviews, please do not assume I have seen them. Please email them to me so I can post them on the Forum.
Thanks for your help,
George



4.0 out of 5 stars Easy to understand cash flow analysis., May 15, 2009
By Ratatosk (Europe) - See all my reviews
This book is about cash flow analysis with emphasis on how much excess cash is generated by a company, also know as the Free Cash Flow, and which may deviate significantly from the reported Net Income hence revealing that a company is either more or less profitable than its Net Income suggests. For the most part the book is well written and easy to read.

The book was written by a former banker who focused on whether a company generated enough cash to repay its debt. I like that angle and combined with the book's simple language it is the best book for analysing cash flows that I am aware of. The book could however be improved in a few places which is why I haven't given it 5 stars. In particular I would have liked a deeper explanation and discussion of why the author has chosen that particular definition of Free Cash Flow as opposed to other definitions, e.g. why working capital changes are included. I would also have liked a deeper discussion on how to treat debt in the analysis, whether to deduct it or whether one should assume the same debt level could be sustained for eternity.

The book also includes Excel spreadsheets for calculating Free Cash Flow and these are made available for download on the internet. The book gives a long and detailed description on how to complete and interpret these spreadsheets. You will probably skip most of this description on a first reading and only use it for later reference, but it is very good to have when learning to use the techniques for computing Free Cash Flow, and more books in finance should have such detailed descriptions of their methods.

The book is recommended for people already experienced in analysing financial statements. While determined novices may also use this book for learning these things, I do recommend starting out with getting a proper understanding of financial statements first, for example by starting with the book Financial Statements by Thomas Ittelson.
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3.0 out of 5 stars Great investment advice but presented poorly, May 14, 2009
By Queen_Anne_Drizzle (Seattle, WA) - See all my reviews
I agree with most of what Christy writes. Free cash flow is the most important financial metric to follow. Christy points out that free cash flow is important but the smart investor also follows where the money is going. For example, you have to look at dividends, share buybacks, acquisitions and debt. Furthermore, his advice about examining annual reports to evaluate the tone of the CEO, her priorities and executive compensation are all very sound advice.

My problem with the book was its presentation. There is a long chapter in the middle of this fairly short book which ties it to his website. I found it hard to follow and tedious. A book should be stand alone and I did not like being directed to his Excel spreadsheets on his website. Teaching you how to design your own spreadsheets is fine but I did not think that the author did a good job teaching you how to do this through his book. Overall, great wisdom but needs improvement with writing and presentation.
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