Free Cash Flow Is At Least As Important As Profit In Assessing A Farm Firm

This paper suggests that most small agribusinesses can use a short cut to see how their firms are doing financially. The short cut requires that they calculate and follow (1) profit and (2) free cash flow. Both are defined and clarified. The reason for this short cut is that most small firm owners do not do enough financial analysis and that this simple and quick study may encourage them. The paper does not encourage the substitution of these two numbers for a proper analysis. They are useful but more of a bait to land the full course.

Keywords: Financial analysis, small agribusiness firms, profit, free cash flow, allocation, income statement.