- free cash flow
- A measure of the cash that a company is generating or consuming. Free cash flow is often defined as after-tax operating profit less net capital expenditure:free cash flow = revenues – operating expenses + depreciation – taxes – capital expenditure costsHowever, there is no precise definition of free cash flow: another equation might include changes in working capital. Making comparisons between companies on this basis is not very useful if they are using different definitions. Free cash flow is not determined in accordance with generally accepted accounting principles (GAAP) and should be considered in addition to, not as a substitute for, financial measures determined in accordance with GAAP.Free cash flow is important for managers as a positive cash flow can be used to pay dividends, acquire other companies, or invest in new opportunities. It is also an important measure of a company's ability to reduce debt. The value of a company can be calculated as the sum of the future discounted free cash flows (see discounted cash flow).
Accounting dictionary. 2014.
Look at other dictionaries:
free cash flow — Cash flow from operations minus capital expenditures and dividends. Cash flow from operations is reduced by those adjustments to generate a measure of cash available to meet other corporate purposes. While the above definition is commonly used by … Financial and business terms
Free cash flow — In corporate finance, free cash flow (FCF) is a cash flow available for distribution among all the security holders of a company. They include equity holders, debt holders, preferred stock holders, convertibles holders, and so on.There are two… … Wikipedia
free cash flow — A measure of the cash that a company is generating or consuming. Free cash flow is often defined as after tax operating profit less net capital expenditure: free cash flow = revenues operating expenses + depreciation taxes capital expenditure… … Big dictionary of business and management
free cash flow — noun Net income plus depreciation and amortization, less changes in working capital, less capital expenditure. Free cash flow can be very negative for profitable, fast growing businesses and very positive for unprofitable, declining ones … Wiktionary
Free Cash-Flow — Der Cashflow [kæʃ fləʊ] (engl. für Geldfluss, Kassenzufluss) ist eine wirtschaftliche Messgröße, die den aus der Umsatztätigkeit und sonstigen laufenden Tätigkeiten erzielten Nettozufluss liquider Mittel während einer Periode darstellt. Die… … Deutsch Wikipedia
Free Cash Flow — Der Cashflow [kæʃ fləʊ] (engl. für Geldfluss, Kassenzufluss) ist eine wirtschaftliche Messgröße, die den aus der Umsatztätigkeit und sonstigen laufenden Tätigkeiten erzielten Nettozufluss liquider Mittel während einer Periode darstellt. Die… … Deutsch Wikipedia
Free Cash Flow - FCF — A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base … Investment dictionary
Free Cash Flow Yield — An overall return evaluation ratio of a stock, which standardizes the free cash flow per share a company is expected to earn against its market price per share. The ratio is calculated by taking the free cash flow per share divided by the share… … Investment dictionary
Free Cash Flow To Sales — A ratio that illustrates the percentage of free cash flow to the amount of sales. The numerator is found by determining a company s free cash flow, which is available to debt and equity holders. The denominator is the company s annual sales. Free … Investment dictionary
Free Cash Flow Per Share — A measure of a company s financial flexibility that is determined by dividing free cash flow by the total number of shares outstanding. This measure serves as a proxy for measuring changes in earnings per share. Calculated as: This measure… … Investment dictionary