To any new non-finance employee, the concept of a company’s “free cash flow” may sound more than a little daunting. But at Ethicon, one of the oldest and most profitable business units of Johnson & Johnson Co., the belief is that a little financial education goes a long way toward keeping the business healthy.
“Every decision an employee make can affect P&L,” notes Dace Heckler, a senior financial analyst at Ethicon, which develops surgical and wound-care products. “We want everyone to understand how daily operations in our plants impact profits and how Ethicon continues to generate excess free cash flow for Johnson & Johnson.”
Apples & Oranges helps participants discover that the faster the cash moves through the company, the more profitable it will be,” explains Cummings. “They quickly see how different decisions or events along the business cycle can free up or hold up the cash flow.
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