| name | value-cashflow |
| description | Use when translating operating results into unit economics, free cash flow, ROIC, CapEx, working capital, or long-range cash-flow scenarios. |
Value Cashflow
Discipline for connecting operational choices to future free cash flow. The goal is to understand how a business creates, consumes, and allocates cash as an owner, not to produce a single pseudo-precise forecast.
The Cash-Flow Bridge
Always build the full chain from customer value to capital allocation. Do not skip links — a conclusion that jumps from revenue to FCF hides the working-capital and CapEx that determine real cash generation.
customer value
→ price / volume / mix
→ variable cost and fixed cost
→ operating profit
→ receivables / inventory / payables (working capital)
→ operating cash flow
→ maintenance CapEx and growth CapEx
→ free cash flow
→ capital allocation and ROIC
For every link, state the operating driver, the direction it pushes cash, and the evidence class behind the number.
Required References
references/industry-adaptation.md — select the closest business archetype (consumer/retail, manufacturing/automotive, SaaS/recurring, or platforms/marketplaces) and apply the leading operational metrics that map to FCF. Ask before applying a metric that does not fit the company's operating model.references/evidence-ledger.md — record each figure under its evidence class and use the cash-flow driver tree and assumption register templates.
Discipline Rules
- Select an archetype first. Name the business archetype before applying industry metrics. If none fits cleanly, say so and ask.
- Label unsupported inputs as assumptions. Any figure the user has not supplied and you cannot source is an
Assumption, with a stated range and a falsification condition — never a fact.
- Test profit before inferring FCF growth. When profit rises, check receivables, inventory, payables, and CapEx before concluding that free cash flow grew. Profit growth funded by accruals or channel inventory is not cash growth.
- Separate maintenance from growth CapEx. Only cash left after maintaining competitiveness is discretionary free cash flow.
- Track the cash conversion cycle. Days sales outstanding + days inventory outstanding − days payable outstanding. A widening gap converts profit into trapped working capital.
- Scenario, not point forecast. Present bear, base, and bull as conditional stories with triggers, transmission paths, and falsification criteria — never a single false-precision number.
Driver Discipline
End with no more than three FCF drivers, each expressed as a mechanism (the operating variable and how it transmits to cash), backed by its evidence class, and paired with the metric that would disprove it.
