It is a truth universally acknowledged by business executives, Wall Street analysts, and investors the world over that cash is the lifeblood of an enterprise.
Free cash flow is a critical business performance metric. It’s how we measure successful investment and execution, how profit is distributed to shareholders, and how employees get paid. Without cash, a company folds. Irrespective of their size, shape, or footprint, businesses are on a continuous hunt for cash. At the same time, as the broader corporate goals are broken down into separate key performance indicators (KPIs), the primacy of optimizing organizational cash can get lost. In other words, the metrics provide no insight into how actions taken in one part of the business affect cash generated or held elsewhere. It prompts the question: If cash is king, why is it treated as a by-product rather than a focus?
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