Free cash flow is a measure that helps business owners, investors and others assess a business’s financial performance and outlook. Free cash flow is defined as operating cash flow minus capital ...

Fact checked by Jared Ecker Reviewed by Natalya Yashina Cash flow analysis is an important aspect of a company's financial management because it reveals the cash it has available to pay bills and ...

This example will help you get a better understanding of how to calculate free cash flow. Let’s start with calculating operating cash flow and then move on to calculating capital expenditures.

Free cash flow reflects the amount of cash free for distribution to all stakeholders. There are many ways to calculate free cash flow. Most approaches are short cuts. Our formula can be seen below.

For example, asking ChatGPT 3.5 to calculate Microsoft’s free cash flow in the latest quarter will result in only a definition as the answer, while 4.0 will provide an explanation and search ...

Free cash flow isn't a standard calculation as per generally accepted accounting principles (GAAP), which means that how companies calculate the metric can vary.