Difference Between Free Cash Flow, Net Income, and EBITDA

Free Cash Flow (FCF) reflects the cash available after accounting for capital expenditures necessary for maintaining or expanding operations. Net Income represents the profit generated by subtracting expenses from revenue on the income statement, but it doesn’t consider non-cash items or capital expenditures. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) measures a company’s operating performance before accounting for non-operating expenses and capital expenditures, providing a clearer picture of operational profitability.

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