Back in November, I took a look at the earnings report put out by education software provider eCollege (NASDAQ:ECLG), and declared it "Valuation Soup."

The Denver-based provider of outsourced services for online education providers routinely confounds and bemuses investors with the plethora of information it gives for use in evaluating its performance, offering up a variegated menu of metrics including: net earnings, pro forma earnings, adjusted earnings, and adjusted pro forma earnings.

It proves the old saw true: There's such a thing as too much information.

With so many targets to choose from, it can be hard to keep them all straight, to remember which one you looked at last quarter (or last year) and which one the company emphasized. For those of you playing the Wall Street expectations game -- it's difficult to determine just which of these metrics analysts are referring to when they state their earnings forecasts. (You'll notice that that's conspicuously not explained on most"estimates" pages.)

Now, I'm just a simple Fool, and I have a rule that I stick by when ordering at any restaurant (or school cafeteria, let me say, in a vain attempt to keep this analogy alive). I find one thing I like and order it over and over again. Similarly, when evaluating companies, I pick one metric, and try to stick with it over time and among different companies. So when eCollege reports its earnings tomorrow, I'll be doing just that. Just like five months ago, I'll again look for free cash flow, and pay no heed to the various flavors of adjusted and pro forma (Latin for "caveat emptor") earnings that eCollege offers up.

eCollege has already reported generating $7.5 million in free cash flow through the first nine months of 2004. If the company continued collecting cash at that pace through the fourth quarter, then tomorrow we should see somewhere in the neighborhood of $10 million in free cash flow for the full year -- a quantum leap from last year's $1.6 million. That growth rate is, of course, clearly unsustainable, even for a relatively new company like this one.

What we're more likely to see in the years ahead is something resembling the company's projections for fiscal 2005: free cash flow in the neighborhood of $12,400, for an FCF growth rate in the mid-20% range. Even that more muted rate, though, makes eCollege look like an attractive investment at its current enterprise value of just over $260 million and EV/FCF of 26. It's a better deal than cash flow-negative rivals Skillsoft (NASDAQ:SKIL), SumTotal (NASDAQ:SUMT), and VCampus (NASDAQ:VCMP). And the only better deal in this space appears to be Blackboard (NASDAQ:BBBB) and its EV/FCF of 13.

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Fool contributor Rich Smith has no position in any company named above.