Free cash flow
Cash left after operating cash generation and capital expenditure.
Plain languagePractical exampleConnected reading
01
What is it?
Cash left after operating cash generation and capital expenditure.
02
Why does it matter?
It indicates capacity to reduce debt, pay dividends, repurchase shares or fund growth.
03
How should it be read?
Check definitions for operating cash, capex, leases and one-off items.
04
Common mistake
Assuming one strong quarter of cash flow is sustainable.
A simple example
Operating cash of 120 million and capex of 45 million yield about 75 million of free cash flow.