Watch PE when valuing a company

[FFNow]

Hi FFNow, trying to understand your statement "If the company has good cash flow but no earnings, it might be a turnaround situation". Could you elaborate more and appreciate if you could share on why, when one company doesn't has no earnings but has good cash flow, it might be a turnaround?

Thanks for sharing!

Hi VIChris, it's best explained through this site: http://www.investopedia.com/ask/answers/...z2FDCsAq56. With positive free cash flow, the money can be pumped back into its business to bring earnings back to positive by making more quality goods and selling them, etc but that will take some time. A good example is Grand Bank Yacht.