Tuesday, February 22, 2011

Barrick (ABX) Adds Free Cash Flow to Statistics

Toronto-based Barrick (NYSE:ABX), the world's biggest gold miner by output and market value (capitalisation), has introduced "free cash flow" into its key statistics, as of the release of its fourth quarter, and full year, 2010 results.

As simple as the measure's computation may be - as Barrick puts it, "we deducted capital expenditures from adjusted operating cash flow to arrive at free cash flow" - firms of all kinds across the world have been slow to warm to publishing a measure that could arguably rank as the single most important in gauging underlying performance.

While the ongoing harmonization of accounting around the world under IFRS makes sense (the US remains on GAAP, for now), income statements are, sadly, arguably less useful than ever. This may be a case of trying to please too many people for much, if not most, of the time.



Source: Mineweb

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