𝘚𝘵𝘰𝘳𝘪𝘦𝘴 𝘢𝘯𝘥 𝘭𝘦𝘴𝘴𝘰𝘯𝘴 𝘧𝘳𝘰𝘮 𝘢𝘯 𝘶𝘯𝘦𝘹𝘱𝘦𝘤𝘵𝘦𝘥 𝘫𝘰𝘶𝘳𝘯𝘦𝘺 𝘪𝘯 𝘧𝘪𝘯𝘢𝘯𝘤𝘦.

One of the most misunderstood financial metrics—by boards and founders alike—is free cash flow (FCF). It sounds technical, but it’s really this: FCF is your Netflix money.

Think about your personal finances. Each month you pay the must-haves: rent or mortgage, groceries, utilities, insurance. In business, that’s payroll, COGS, hosting, vendor payments—everything required just to keep things running. Whatever’s left becomes your decision space: Netflix, a weekend trip, or that questionable 11 p.m. Amazon purchase.

That leftover, flexible cash is free cash flow.

Revenue doesn’t matter unless it turns into cash. Profit doesn’t matter unless it converts into cash. And EBITDA doesn’t matter unless it eventually becomes cash. FCF is the reality check: after paying obligations and reinvesting what’s required, how much cash is actually left?

Companies use FCF for three things:

1. Growth – New products, new markets, key hires, systems, acquisitions.
2. Debt Repayment – Lower interest and strengthen the balance sheet.
3. Dividends/Buybacks – Rewarding investors and signaling confidence.

When FCF is strong, leaders have options. Plans get funded. Debt drops. Investors relax. The business can weather rough quarters.

When FCF is weak or negative, the company is living paycheck to paycheck. Every initiative becomes a debate. Lenders tighten up. Investors get anxious. And suddenly the CFO becomes very popular—for the wrong reasons.

The tricky part? You can’t fake free cash flow. You can adjust EBITDA or shift expenses, but cash is cash. It’s either in the bank or it isn’t.

That’s why seasoned CFOs obsess over FCF. It’s the clearest indicator of discipline, efficiency, and strategic health. It shows whether the company can fund its ambitions—or whether you’ll be raising capital every year.

So the next time someone celebrates a new customer logo or big revenue jump, ask:

“Great—but how’s free cash flow?”

👉 What’s one thing your company could do this quarter to improve FCF?

#TheAccidentalCFO #inersec #FreeCashFlow #Leadership #Growth