How To Calculate Free Cash Flow in SAP Business One | Arithmix

Calculating free cash flow is an important aspect of financial analysis for any business. It helps to determine how much cash a company has available after accounting for all of its expenses and investments. This information can be used to make informed decisions about future investments, debt repayment, and other financial strategies. In this article, we will discuss how to calculate free cash flow and why it is valuable to do so.

What Is Free Cash Flow?

Free cash flow is the amount of cash that a company has available after accounting for all of its expenses and investments. It is calculated by subtracting capital expenditures from operating cash flow. Operating cash flow is the amount of cash that a company generates from its normal business operations, while capital expenditures are the amount of money that a company spends on investments in property, plant, and equipment.

Free cash flow is important because it represents the amount of cash that a company has available to invest in new projects, pay dividends to shareholders, or repay debt. It is a key metric for investors and analysts because it provides insight into a company's financial health and its ability to generate cash.

When Is It Valuable To Calculate Free Cash Flow?

Calculating free cash flow is valuable in a variety of situations. For example, if a company is considering a new investment or acquisition, it can use free cash flow to determine whether it has the financial resources to pursue the opportunity. Similarly, if a company is looking to pay down debt, it can use free cash flow to determine how much it can afford to pay each year.

Free cash flow is also valuable for investors who are looking to evaluate a company's financial health. By analyzing a company's free cash flow over time, investors can gain insight into its ability to generate cash and its overall financial stability. This information can be used to make informed decisions about whether to invest in a particular company.

In conclusion, calculating free cash flow is an important aspect of financial analysis for any business. It provides valuable insight into a company's financial health and its ability to generate cash. By understanding how to calculate free cash flow and when it is valuable to do so, businesses and investors can make informed decisions about their financial strategies.

How Do You Calculate Free Cash Flow in SAP Business One

SAP Business One 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 SAP Business One 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 SAP Business One, 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 SAP Business One 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 SAP Business One 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.