Finance glossary
Free Cash Flow
Definition
Cash a company generates after paying for capital expenditures.
Free Cash Flow equals operating cash flow minus capital expenditures. It is the cash left over that can be used to pay dividends, buy back stock, pay down debt, or reinvest in the business. FCF is often considered a more reliable profitability metric than net income.
In a sentence
Strong free cash flow let the company raise its dividend and still pay down debt.
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