M2D1: Cisco Systems

Free cash flow is often considered a more reliable measure of a company’s net income than reported earnings.

Read the section “Free Cash Flow at Cisco Systems” from your textbook (p. 123) and respond to the following:

• What are some possible ways that corporate accountants might be able to change their earnings to portray a more favorable earnings statement?

• What type of indicators might an investor (or reader of financial statements) look for that would indicate that the free cash flow of a company might be in jeopardy?

Post your primary response. Read any postings already provided by your instructor or fellow students. See the SBT Discussion Rubric for how you will be evaluated for this activity. Remember to read the feedback to your own major postings and reply to it throughout the module.

See the Course Calendar for due dates for posts and responses.

Compose your work using a word processor and save it, as a Plain Text or an .rtf, to your computer. When you’re ready to make your initial posting, please click on the “Create Thread” button and copy/paste the text from your document into the message field. Be sure to check your work and correct any spelling or grammatical errors before you post it.

Evaluation Criteria

Review the SBT Discussion Rubric located in the “Start Here” section of the course for more information on grading criteria.