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I have read the article "What Is Free Cash Flow?" by Bill Mann. Pretty straightforward. My question is - what do I do with the cash flow figure once I have it calculated? Do I compare it with some other item in the financial statements, or compute a ratio of some kind, or what? What is a "good" free cash flow, and what isn't? Thanks.
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Dear Boriss,

I think you may want to compare it to earnings. If it is much higher, accounting income may be understating the cash earnings value of a company, and vice versa.

Lleweilun Smith
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boriss98,

what do I do with the cash flow figure once I have it calculated?

I compare FCF (current) to previous periods within the same company. Within the same sector, FCF comparisons may help define which business is executing better, esp. as a ratio of FCF to net. I am just starting to use it as an input in DCF computations where it seems to be quite useful.

Bruce
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