Cash Flow Diagram Example. Keep in mind that the purpose of the diagram is to illustrate a complex financial transacation as concisely as possible. At appropriate times expenses and costs are shown.
In general we want to add labels to our diagram but only to the point that they are helpful. Free cash flow to the firm fcff this is a measure that assumes a company has no leverage debt. Now that we know how to draw cash flows we can embellish our diagram to make it more useful.
A cash flow diagram presents the flow of cash as arrows on a time line scaled to the magnitude of the cash flow where expenses are down arrows and receipts are up arrows.
Read more about fcff unlevered free cash flow unlevered free cash flow is a theoretical cash flow figure for a business assuming the company is completely debt free with no interest expense. Each company also reported a net income of 225 000 for 2007. It is used in financial modeling and valuation. A loan transaction starts with a positive cash flow when the loan is received and continuous with negative cash flows for the pay offs.
