Nov 03, 2009 - 6:24 AM EST
The following is a Free Cash Flow Analysis of Microsoft (MSFT) from 1993-2011. The key ratios that I will use in the analysis are price to free cash flow (PFCF) and Free Cash Flow Return on Invested Capital (FROIC) as well as debt to equity.
When investing I look for PFCF below 15 times and FROIC above 20%+. When you are lucky enough to find a combination of the two you find a perfect balance of growth + value and you get capital appreciation through capital preservation.
Source: Seeking Alpha (Nov 03, 2009 - 6:24 AM EST)