{"id":3915,"date":"2023-03-15T07:07:01","date_gmt":"2023-03-15T07:07:01","guid":{"rendered":"https:\/\/fisdomdevel.wpengine.com\/glossary\/free-cash-flow\/"},"modified":"2023-03-15T07:07:01","modified_gmt":"2023-03-15T07:07:01","slug":"free-cash-flow","status":"publish","type":"post","link":"https:\/\/www.fisdom.com\/glossary\/free-cash-flow\/","title":{"rendered":"Free Cash Flow"},"content":{"rendered":"<p>\nFree cash flow (FCF) is defined as the cash left with a company after it pays for its businesses\u2019 operating expenses and capital expenditures. These include payments towards rent and taxes, payroll and other such expenses. FCF is an important parameter for investors and for management alike for making investment and business decisions respectively. Free cash flow is an indicator which demonstrates the company\u2019s efficiency and its management\u2019s capability. Investors use Free Cash Flow to measure whether a company might have enough cash for dividends, growth, expansion or share repurchase programs.<br \/>\nAlso, a better FCF will help the company in paying off its debts and help in business growth, which in turn will make it a more attractive investment.<\/p>\n<h2>Calculation of Free Cash Flow<\/h2>\n<p>Calculation of Free Cash Flow <\/p>\n<p>Using Operating Cash flow:<br \/>\nFree Cash Flow (FCF) =  Operating Cash Flow &#8211; Capital Expenditure<\/p>\n<p>Using Sales Revenue method:<br \/>\nFree Cash Flow =  Sales revenue &#8211; (Operating Costs + Taxes)<\/p>\n<h2><\/h2>\n<h2><\/h2>\n<h2><\/h2>\n<h2><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Free cash flow (FCF) is defined as the cash left with a company after it pays for its businesses\u2019 operating expenses and capital expenditures. These include payments towards rent and taxes, payroll and other such expenses. FCF is an important parameter for investors and for management alike for making investment and business decisions respectively. Free [&hellip;]<\/p>\n","protected":false},"author":67,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-3915","post","type-post","status-publish","format-standard","hentry","category-stocks"],"_links":{"self":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/3915","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/users\/67"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/comments?post=3915"}],"version-history":[{"count":0,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/3915\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/media?parent=3915"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/categories?post=3915"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/tags?post=3915"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}