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If You Can’t Measure It, You Can’t Grow It

Your metrics aren’t just numbers—they’re building blocks.

Each one reveals how well your business is performing and where growth is being blocked.

Start here to fix what matters and scale what works.

Builders Block #6

Free Cash Flow

_
Definitions.

The net amount of cash and cash equivalents moving into and out of your business over a specific period.

RELEVANCE:

Essential for managing day-to-day operations, covering expenses, and investing in growth initiatives.

CALCULATION

Net income + Depreciation/Amortization – Change in Working Capital – Capital Expenditure.

BENCHMARK AGAINST

Compare your cash flow metrics to industry averages or benchmarks to ensure healthy financial management.

builders blocks relevance image

builders blocks benchmark

Storytime.

Mark owned a growing tech startup that developed innovative apps. As his business expanded, Mark started paying closer attention to the money flowing in and out of the company. He knew revenue was important, but his mentor advised him to focus on something even more crucial: Free Cash Flow.

Mark sat down to figure it out. After covering all expenses like salaries, rent, and equipment, he found that the money left over was his Free Cash Flow. This was the cash he could use to invest in new projects, pay off debt, or save for a rainy day.

His mentor explained, “Free Cash Flow shows how much money you really have at your disposal after running the business. It’s key to understanding your company’s financial health.”

Mark realized that by focusing on Free Cash Flow, he could make smarter decisions about growing his startup sustainably, ensuring it had the cash needed to seize opportunities and weather challenges.

Doing
The math.

Calculate Free Cash Flow

Net Income

What is your net income for the quarter?

Enter Value Here

$

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Depreciation/Amortization

How much was your depreciation expense last quarter?

Enter Value Here

$

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Change in Working Capital

How much did your working capital change last quarter?

Enter Value Here

$

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Capital Expenditure.

What was your capital expenditure last quarter?

Enter Value Here

$

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YOUR TOTAL POINTS

0

Other
Builders Blocks.

Marketing Return on Investment (ROI)

Marketing ROI measures the profitability of your marketing efforts. A positive ROI means your marketing strategies are paying off.

Gross Profit Margin

Gross Profit Margin reveals how much money you’re making after subtracting the costs of goods sold. It’s an important measure of your business’s core profitability.

Customer Retention Rate

This metric shows the percentage of customers who continue to do business with you over time. A high retention rate signifies loyalty and satisfaction.