Folks,

It is important when you assess the dividend payment capacity of Cherokee that you add depreciation charges back into net income to arrive at cash flow per share--from which the dividend is paid. Merely looking at earnings and stating that the dividend is doomed because it exceeds earnings per share is faulty logic. You have to arrive at a cash flow per share number to acurately judge the capacity of CHKE to maintain its .50 quarterly dividend. There is also cash per share on the balance sheet from which to draw should cash flow not fully cover the dividend.

This is not to say that things aren't tight at CHKE in regard to the dividend, but they are not as bleak as most think because they fail to look at critical cash flow measures and cash on the balance sheet.

dabqs