Free Cash Flow Calculation Formula

The free cash flow calculation formula subtracts capital expenditures from operating cash flow. It’s expressed as: Free Cash Flow = Operating Cash Flow – Capital Expenditures. This metric represents the cash generated by a company after accounting for expenses necessary to maintain or expand its asset base, providing insights into its financial health and ability to pursue growth opportunities.

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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Autonomous O2C to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.

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