Industries Peaking and Keeping Attention What is GULP?

Applying Sixth-Grade Math to Free Cash Flow

We’re looking to pay 10x free cash flow or less, period. If you find those and you can’t figure out how to kill the business, you should be buying all day long. We’ve always done very well when we can use sixth-grade math on the back of a post card to show how inexpensive something is relative to its free cash. Once we start getting more sophisticated – trying to prove something rather than see if we can disprove it by killing the business – we get into trouble.
Tags: value, cash, strategy