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"&amp;lt;p&amp;gt;Cash is the gasoline that makes your business run. A\u00A0cash flow analysis is a method of checking up on your firm\u2019s financial health. It is the study of the movement of cash through your business, called a cash budget, to determine patterns of how you take in and pay out money.\u00A0&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;A complete, line by line, explanation of building and analyzing a &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-do-a-cash-budget-for-your-business-393114&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;cash budget&amp;lt;/a&amp;gt;.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Keeping track of\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/cash-flow-how-it-works-to-keep-your-business-afloat-398180&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;cash flow&amp;lt;/a&amp;gt;\u00A0is essential for the survival of your small business. However, accountants sometimes speak about the\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-prepare-a-statement-of-cash-flows-393584&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;2&amp;quot;&amp;gt;Statement of Cash Flows&amp;lt;/a&amp;gt;\u00A0and the\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-do-a-cash-budget-for-your-business-393114&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;3&amp;quot;&amp;gt;Cash Budget&amp;lt;/a&amp;gt;.\u00A0What do they mean, exactly, and how are they different?\u00A0&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;A business owner must look at the last two years of the firm&amp;amp;#39;s balance sheets and compare the differences between the two in order to develop the\u00A0&amp;lt;a data-inlink=&amp;quot;5sucRxbGUztlGL82s1RkEw&amp;amp;#61;&amp;amp;#61;&amp;quot; href=&amp;quot;https://www.thebalance.com/detailed-steps-in-preparing-a-statement-of-cash-flows-393239&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;Statement of Cash Flows&amp;lt;/a&amp;gt;. With sample information from an income statement and the information from these comparative balance sheets, you can develop your Statement of Cash Flows.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Analyzing a &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-prepare-a-statement-of-cash-flows-393584&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;Statement of Cash Flows&amp;lt;/a&amp;gt; involves looking at the sources and uses of funds from the comparative balance sheets. Here is a line-by-line cash flow analysis of a sample Statement of Cash Flows.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;The free cash flow calculation is one of the most important results from cash flow analysis that you, as a small business owner, can take away from the analysis of your company&amp;amp;#39;s\u00A0&amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-prepare-a-statement-of-cash-flows-393584&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;Statement of Cash Flows&amp;lt;/a&amp;gt;.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Simply put, free cash flow is the cash that a company has left after it pays for any capital expenditures it makes, like new plant or equipment.\u00A0&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Free cash flow is the gold standard of your company&amp;amp;#39;s financial health. Add an analysis of your company&amp;amp;#39;s free cash flow to your cash flow analysis to make it stronger.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Free cash flow is how much money your business has left over to use for other purposes after it has paid for capital expenditures, including buildings and equipment, and other expenses needed to sustain its ongoing operation.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;There are three ways to calculate free cash flow, all leading to the same answer. Here are examples of all three ways.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;There are several\u00A0&amp;lt;a data-inlink=&amp;quot;nJYdlENXIz60hHBi5G38wg&amp;amp;#61;&amp;amp;#61;&amp;quot; href=&amp;quot;https://www.thebalance.com/find-your-debt-ratio-393230&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;financial ratios&amp;lt;/a&amp;gt;\u00A0that help the business owner to focus on cash flow.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Calculating the cash flow ratios for your company can tell you about its liquidity, solvency, and viability. Add these calculations to your cash flow analysis to strengthen it.&amp;lt;/p&amp;gt;"^^<http://www.w3.org/2001/XMLSchema#string>
<https://www.thebalance.com/cash-flow-analysis-393050>