Skip to main content

learn.howToCalculate

learn.whatIsHeading

Free Cash Flow (FCF) = Operating cash flow - Capital expenditures. Shows cash available to debt/equity holders after reinvestment.

ଷ୍ଟେପ୍-ଷ୍ଟେପ୍ ଗାଇଡ୍ |

  1. 1Calculate operating cash flow from statement
  2. 2Subtract capex for maintenance and growth
  3. 3FCF shows true distributable cash

ସମାଧାନ ହୋଇଥିବା ଉଦାହରଣ

ଇନପୁଟ୍
Operating CF $500M, capex $150M
ଫଳ
FCF = $350M available for shareholders/debt
Often differs from net income

ଏଡ଼ାଇବା ଯୋଗ୍ୟ ସାଧାରଣ ଭୁଲ

  • Using net income instead of OCF
  • Not separately tracking maintenance vs. growth capex

ବାରମ୍ବାର ଜିଜ୍ଞାସା

Why is FCF important?

Better than earnings for valuation; cash flows matter, not accounting adjustments.

ସେଟିଂ