Free Cash Flow
Free cash flow (FCF) in accounting and earnings reports represents the cash a company retains after covering operating expenses—like salaries and utilities—and capital expenditures. It’s calculated as FCF = Operating Cash Flow − Capital Expenditures. This metric is vital for investors, directly reflecting a company’s financial strength and flexibility. High FCF indicates the ability to pay dividends, fund expansion, or repurchase shares, while low FCF may signal constraints. By showing disposable cash after essential costs, FCF offers insight into a company’s capacity to generate value and pursue growth opportunities effectively.
Related Terms
Commodity Futures
A commodity futures contract is an agreement between two parties to buy or sell a...
Futures
Futures are derivative contracts that create an agreement between two parties to buy or sell...
Abc Wave Theory
The ABC Wave Theory, also known as Elliott Wave Theory, is a method used to...
Basing
Basing occurs when a security’s price moves sideways after an extended decline, forming a “base”...
Filing
Filing refers to submitting essential documents to SEBI before an Initial Public Offer (IPO). This...
Hard Underwriting
Hard underwriting occurs when the underwriter agrees to purchase their allocated share of stock before...
