How To Calculate Free Cash Flow in Odoo ERP | Arithmix

Free cash flow is an essential metric for businesses to understand their financial health. It measures the cash generated by a company after accounting for all expenses, including capital expenditures. Calculating free cash flow in Odoo ERP is a straightforward process that can provide valuable insights into a company's financial performance.

What Is Free Cash Flow?

Free cash flow is the cash generated by a company that is available to be used for investments, dividends, or debt repayment. It is calculated by subtracting capital expenditures from operating cash flow. Operating cash flow is the cash generated by a company's core operations, such as sales and services, minus any expenses incurred. Capital expenditures are the expenses incurred by a company to maintain or expand its assets, such as property, plant, and equipment.

Free cash flow is an important metric for investors and analysts because it indicates a company's ability to generate cash and fund its growth. A positive free cash flow indicates that a company has enough cash to invest in new projects, pay dividends, or reduce debt. Conversely, a negative free cash flow indicates that a company may need to borrow money or sell assets to fund its operations.

When Is It Valuable To Calculate Free Cash Flow?

Calculating free cash flow is valuable for any business, regardless of its size or industry. It can help businesses understand their financial performance and make informed decisions about investments, dividends, and debt repayment. For example, a company with a positive free cash flow may decide to invest in new projects or pay dividends to shareholders. On the other hand, a company with a negative free cash flow may need to reduce its expenses or borrow money to fund its operations.

Free cash flow is also valuable for investors and analysts who are evaluating a company's financial health. It can provide insights into a company's ability to generate cash and fund its growth, which can affect its stock price and credit rating. Investors and analysts may use free cash flow to compare companies within the same industry or to evaluate a company's performance over time.

In conclusion, calculating free cash flow in Odoo ERP is a simple process that can provide valuable insights into a company's financial performance. It is an important metric for businesses, investors, and analysts to understand and use to make informed decisions about investments, dividends, and debt repayment.

How Do You Calculate Free Cash Flow in Odoo ERP

Odoo ERP itself isn’t naturally geared towards letting you calculate complex metrics like Free Cash Flow. As an alternative, teams typically use products like Arithmix to import data from Odoo ERP and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Odoo ERP, combine it with data from other systems, and create calculations like Free Cash Flow.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Free Cash Flow in Arithmix

Calculating metrics like Free Cash Flow is simple in Arithmix. Once you've created your free account, you’ll be able to import your Odoo ERP data, and use it to create natural language formulas for metrics like Free Cash Flow.

Arithmix is designed to give you the power to build any calculations you want on top of your Odoo ERP data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.