Usage and Context
Free Cash Flow is important for businesses. It shows how much money they have to grow, pay debts, or give back to shareholders.
Frequently asked questions
What is free cash flow of a company?
Free cash flow is the money left after a company pays for its major costs. It`s what they have left to use for other things.
How does capital expenditure affect free cash flow?
Capital expenditure is money spent on big, important things like equipment. It reduces free cash flow because it`s a big cost that comes out of the company`s cash.
Is free cash flow the amount of cash flow remaining after a company makes the asset investment necessary to support operations?
Yes, free cash flow is what`s left after a company pays for the big things it needs to run its business. It`s the leftover cash.
Benefits
Free cash flow is good for businesses. It means they have extra money. They can use it to grow, reduce debt, or give money back to their owners.