Difference between revisions of "Free cash flow"
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*[[Financial management]]. A combination of [[enterprise effort]]s undertaken in order to procure and utilize monetary resources of the [[enterprise]]. | *[[Financial management]]. A combination of [[enterprise effort]]s undertaken in order to procure and utilize monetary resources of the [[enterprise]]. | ||
| − | ==Related lectures== | + | ==See also== |
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*[[Introduction to Financial Management]]. | *[[Introduction to Financial Management]]. | ||
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| + | ===Sources and links=== | ||
| + | *https://www.investopedia.com/terms/f/freecashflow.asp | ||
[[Category: Financial Management]][[Category: Articles]] | [[Category: Financial Management]][[Category: Articles]] | ||
Revision as of 02:53, 9 November 2019
Free cash flow (also known by its acronym, FCF; hereinafter, FCF) is the indicator of cash flow actually available for distribution to the:
- Owners. This type of distribution is known as free cash flow to equity (FCFE); and/or
- Company itself. This type of distribution is known as free cash flow to firm (FCFF),
after the company has made all investments in fixed assets and other projects, as well as set aside the working capital necessary to sustain ongoing operations.
Definitions
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Free cash flow (FCF). The amount of cash that could be withdrawn without harming a firm's ability to operate and to produce future cash flows.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
