Earnings are basically a negotiated number between management and the auditors,subject to considerable manipulation. Cash flow earnings before depreciation and amortization and after working-capital changes and either maintenance or total capital spending is much less subject to manipulation and just a much better measure of corporate profitability. At the same time, free cash flow is what allows companies to increase the value of the business from making capital investments, to making acquisitions, to paying down debt, to buying back stock or paying dividends. Companies that produce free cash flow also attract potential buyers, either financial or strategic.