Posted in Free Cash Flow
A measure of a company’s cash after deducting money from maintaining or expanding its asset base. This measure represents how cash-rich a company is that will allow them to spend on other opportunities to enhance the share holder’s value. A large free cash flow gives company the ability to pay dividends, pursue new products, reduce debts and make new acquisitions. Free cash flow is taken from the difference of operating cash flow and capital expenditures. This measure is mostly use to evaluate the company’s ability to “generate cash.”
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