![]() Adjust for changes in working capital.This information is also available in the cash flow statement or notes to the financial statements. Subtract capital expenditures (CAPEX) or the amount spent on long-term assets, such as property, equipment, or investments. ![]() This can typically be found in the annual report or financial statements. Start with the company's operating cash flow (OCF) from its cash flow statement.Financial media sometimes refer to FCF when reporting on the health or otherwise of specific firms. Where have you heard about free cash flow (FCF)?Īs an investor, you may have seen figures for free cash flow (FCF) given in the reports of companies in which you are invested. Free Cash Flow is considered an important indicator of a company's financial health, sustainability, and ability to generate cash returns for shareholders.Free cash flow represents the cash available to the company for various purposes, such as paying dividends, reducing debt, investing in growth opportunities, or returning value to shareholders.įCF is calculated by subtracting capital expenditures (CAPEX) and changes in working capital from a company's operating cash flow.Free cash flow (FCF) is a financial metric that measures the amount of cash generated by a company's operations after accounting for capital expenditures and working capital requirements.
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