Reducing Cash Flow Ups and Downs

In this video, I explore:

1. The relationship between Operating Profit and Free Cash Flow
2. How Free Cash Flow resembles a wave moving above and below your Operating Profit
3. The amplitude of the wave is driven by Net Working Capital
4. How reducing Net Working Capital reduces the amplitude of the wave thus making the business easier to manage because you have less super lows, more capital and a tighter, more predictable relationship between your Operating Profit and your cash flow.