Comparing Free Cash Flow to Forecast Cash Flow
It can be useful to compare your actual free cash flow to your previous cash flow forecasts. This will help you tweak and refine your forecasting models so you can better understand future profitability.
Using Free Cash Flow for Budgeting
Remember to figure your free cash flow into future business budgeting. As your business expands, costs and revenues are likely to increase, so aligning your budget with free cash flow will be vital to sustained and healthy growth.
Remember that your free cash flow will change over time. We recommend reviewing your free cash flow on a regular basis to understand how your business is doing. You can then make strong, informed decisions on business strategy, so you can use that free cash in the most effective way.