FCF (Free Cash Flow) Formula

The Free Cash Flow (FCF) formula is crucial for assessing a company’s financial health and potential for growth. It’s calculated by subtracting capital expenditures from operating cash flow, providing insight into the cash available after essential investments. Investors use FCF to evaluate a company’s ability to generate cash and its capacity for debt repayment or shareholder distributions. Understanding FCF helps in making informed investment decisions by indicating the company’s financial flexibility and sustainability.

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