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Free Cash Flow



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Free Cash Flow or FCF is a measure that is used to determine the strength in the business and the buying range for the stock.

It tells about the company's financial performance.

FCF is the surplus amount a business generates after it paying of its operating expenses and capital expenditure.

So, FCF = Operating Cash Flow - Capital Expenditures

It shows how efficient a business is in generating cash and if it can pay investors some return after funding its operations and expansions.

FCF is important because it allows a company to pursue opportunities that enhance shareholder value.

So, this can be one of the several factors we can consider for shortlisting companies.

From where can we compute FCF?

The Balance sheet is the best place from where we can get this data.

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