Free cash flow (FCF)
Cash from operations minus capital spending: the cash left after running and maintaining the business.
Formula
FCF = Operating cash flow − Capital expenditures
How to read it
Harder to flatter than earnings. Persistently lower than net income is a warning worth reading into.
How to use it
What the business can pay out, reinvest or use to cut debt.
In Kereon
Investing · company. From the cash-flow statement as filed (operating cash flow plus the negative capex line when no FCF line is filed). Not computed for banks, whose operating cash flow is lending and deposit flows. FCF margin = FCF ÷ revenue.
Also called: free cash flow, fcf, free cash flow margin, fcf margin, fcf growth, fcf conversion.