What is a stock's free cash flow?


by alan , in category: Stocks and Equities , a year ago

What is a stock's free cash flow?

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1 answer

by augustus.ziemann , a year ago


A stock's free cash flow is a measure of a company's financial performance, specifically its ability to generate cash after deducting expenses necessary to maintain or expand its asset base. It represents the cash available for distribution to shareholders, debt repayment, or reinvestment in the business. Free cash flow is calculated by subtracting capital expenditures (CAPEX) from operating cash flow. It is an important metric for investors as it provides insight into a company's financial health, profitability, and potential for future growth or dividends.