Posts Tagged → Cash Flow

A guide to understanding Cash Flow and why it is one of the most important areas to know.

Cash Flow is the movement (flow) of money that comes in and out of a business. Money that moves out (Spent) is known as Cash Outflows while money that moves in (Received) is known as Cash Inflows. Cash Flow is different to earnings as it is a real snapshot of when a business receives money and when it is likely to spend it. Cash flow is the true measure of a company’s financial position. The goal for every business long-term is to have more cash flow coming in than going out, ultimately leading to Free Cash Flow aka owner earnings.

Cash Flow is the movement (flow) of money that comes in and out of a business. Money that moves out (Spent) is known as Cash Outflows while money that moves in (Received) is known as Cash Inflows. Cash Flow is different to earnings as it is a real snapshot of when a business receives money… Continue reading →

What is the FCF Yield and how to use it?

The Free Cash Flow Yield explained. The Free Cash Flow Yield is a “solvency ratio” that measures how much money a company makes in free cash flow relative to its market capitalisation. Many stakeholders, including myself, believe that free cash flow is a more reliable measure than Earnings Per Share.

The Free Cash Flow Yield explained. The Free Cash Flow Yield is a “solvency ratio” that measures how much money a company makes in free cash flow relative to its market capitalisation. Many stakeholders, including myself, believe that free cash flow is a more reliable measure than Earnings Per Share. This is because Cash flow… Continue reading →