Financials

Free cash flow

Operating cash flow minus capital expenditures under a common definition.

What it means

Free cash flow is used to inspect cash generated after spending on property and equipment. Definitions can vary, so the source and formula should be checked.

Example

If operating cash flow is $10 billion and capital expenditures are $3 billion, free cash flow is $7 billion under the common formula.

What not to infer

Free cash flow is not the same as net income and does not include every financing need.