Free cash flow: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Add link.) |
imported>Doug Williamson (Remove surplus link.) |
||
| Line 16: | Line 16: | ||
* [[Cashflow]] | * [[Cashflow]] | ||
* [[EBITDA]] | * [[EBITDA]] | ||
* [[Working capital]] | * [[Working capital]] | ||
[[Category:Cash_management]] | [[Category:Cash_management]] | ||
[[Category:Liquidity_management]] | [[Category:Liquidity_management]] | ||
Revision as of 12:29, 26 June 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.
