Research On Problems Of Free Cash Flow Prediction And Analysis

An enterprise can be considered as a circle sustained by cash. Cash flows are inflows and outflows of cash and cash equivalents of an enterprise. With good and enough cash flows, the enterprise can keep alive and develop. The status of cash flow is decided by the degree of management. The theory of cash flow management includes management environment, ratio of cash flow and cash flow statement. Now, the status of cash flow is not very good in some enterprises in china. The objective of cash flow management is uncertain, which stops the development of cash flow management. To choose free cash flows max as the objective is a good way to solve the problem. What cash flows from operating activities minus capitalized expense is free cash flow. There is no any effect on the development of the enterprise if the cash flows are totally used. Therefore, free cash flow is very important for an enterprise to measure the achievement of management. The thesis proposes that the prediction and analysis of free cash flow are the main contents about free cash flow in use. It's also the key point of the article. The thesis classified the forecast into two categories. One is free cash flow prediction in detail, the other is tendency of forecast. Because the uncertainty of forecast must be considered, so the thesis thinks that math techniques should be applied. The thesis also classifies the analysis into two categories. One is analysis in detail, the main content of study is to analyze the changes in free cash flow, and find the reason of preventing free cash flow from increasing.