Free cash flow: Difference between revisions
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imported>Doug Williamson m (Amend to (1) Note that not all practitioners mean the same thing by Free cash flow; (2) Emphasise that it normally includes a DEDUCTION for net capex.) |
imported>Doug Williamson (Add links.) |
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== See also == | == See also == | ||
* [[Capital expenditure]] | |||
*[[Cash]] | |||
*[[Cash balance]] | |||
*[[Cash flow]] | |||
* [[Cash flow statement]] | |||
* [[Cashflow]] | * [[Cashflow]] | ||
* [[ | * [[EBITDA]] | ||
* [[ | * [[Working capital]] | ||
[[Category:Cash_management]] | |||
[[Category:Liquidity_management]] | |||
Latest revision as of 22:54, 18 July 2022
(FCF).
The net figure obtained by deducting from cash generated by operations - or by an investment - that cash which has been absorbed by operations or by the investment.
Free cash flow normally disregards all cash flows to do with financing.
A very important component of free cash flow is a deduction for net capital expenditure (capex).
The capital base of any ongoing business must be maintained, in order for the business to be sustainable. The deduction for capex within the free cash flow calculation identifies and quantifies this essential cash outflow.
