That's right. It sounds counter-intuitive, but it works great. You wind up with a collection of blocks of code connected by edges. Then, you can use graph theory to work magic on them in a general, correct way. Data flow analysis is based on this.

One thing the graph math does is enable the reconstruction of loops out of the blocks and edges - so you can write loops any way you please, and the compiler will figure it all out and apply general algorithms to it (like loop rotation, loop unrolling, etc.).