No. of Recommendations: 20
Worth having a look at free cash flow vs EPS.
macrotrends.net - Free cash flow Bear in mind that the definition they are using of free cash flow is "operating cash flow minus capital expenditures".
As free cash flow is usually used as a proxy for money being generated, this definition implicitly assumes that the firm in question is doing no expansion capex: that it is all maintenance capex.
If you wanted to juice that number, just stop spending on expansion!
DG does a huge amount of expansion capex, so that definition gives a rather non-obvious view of things.
Have a glance at DG's cash flow statement. Last year their depreciation & amortization line is only 46% of their purchases of property and equipment.
Thus the crude estimate is that their expansion capex was 54% of all capex = $836m.
D&A was 53.4% of P&E capex in the first half.
Jim
