freecashflow

Free cash flow, often abbreviated as FCF, is a financial metric that represents the cash a company generates after accounting for capital expenditures. It is essentially the cash available to a company after it has paid for the assets it needs to maintain or expand its business operations. Free cash flow is considered a key indicator of a company's financial health and its ability to generate value for shareholders.

There are several ways to calculate free cash flow, but a common method is to start with operating cash flow and then subtract capital expenditures. Operating cash flow is the cash generated from a company's normal business operations. Capital expenditures, also known as CapEx, are the funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Positive free cash flow indicates that a company is generating enough cash to cover its operating expenses and invest in its future growth. This cash can be used for various purposes, including paying dividends to shareholders, repurchasing stock, paying down debt, or making acquisitions. A consistently negative free cash flow, on the other hand, might suggest that a company is struggling to generate sufficient cash from its operations and may need to rely on external financing to fund its activities. Analysts and investors often use free cash flow to evaluate a company's profitability, efficiency, and valuation.