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MARKETS / GLOSSARY / FREE CASH FLOW

Free cash flow

Free cash flow is the cash actually left over after running the business and keeping its assets in shape — the money that can pay a dividend, repay debt or buy back shares without borrowing.

Definition

How it is computed here

Formulacash from operations − capital expenditure
UnitCurrency amount
PeriodOne fiscal year, as reported
SourceExtracted from SEC filings; every value on an asset page carries the accounting tag and the filing it came from
Identifierfluxo_caixa_livre
The inputs

What goes into the formula

Cash from operationsCash the business generated, after its running costs and after the swing in working capital.
Capital expenditureCash spent on property, plant and equipment. Subtracted in full: this site does not attempt to split maintenance from growth capex, because the filing does not.

A formula without its inputs explained is decoration. Where an input is missing from a filing, the metric is left empty here rather than completed with a zero or an estimate.

Worked example

How to calculate free cash flow, step by step

One year of a company with real assets.

Cash from operations$620M
Capital expenditure$300M
Dividends paid$120M
Net buybacks$100M
  1. Free cash flow = 620 − 300 = $320M.
  2. Returned to shareholders = 120 + 100 = $220M.
  3. Left over = 320 − 220 = $100M, available to repay debt or add to the cash pile.

Result: $320M free, $220M returned, $100M retained

This is the arithmetic that decides whether a dividend is funded by the business or by the balance sheet. Here it is funded by the business, with room to spare.

The figures in this example are illustrative and rounded — they are not a real company. The real figures on this site are the live ones below and on every asset page, each carrying the filing it came from.

Why it matters

What free cash flow is good for

Free cash flow is the closest single figure to 'what did the owners actually gain this year'. Unlike net income it cannot be moved by depreciation estimates or non-cash charges, and unlike EBITDA it does not pretend the factory maintains itself.

The limit

What this number does not tell you

Free cash flow can be flattered for a year or two by simply not investing — cutting capital expenditure raises it immediately and costs the business later. It also swings with working capital in ways that say more about timing than about performance, and it is before any debt repayment, so a company can be free cash flow positive and still unable to meet the maturity in front of it.

Every metric on this site is published with its blind spot stated. A figure without its limit is half a fact.

In the data

Highest reported free cash flow

From the most recent fiscal year of each company. Only companies reporting in US dollars are ranked here — a figure in yen or won is not larger, it is in another currency.

On a real company

See it in a published filing

Their sectors

These pages show the figure across up to nineteen fiscal years, with the accounting tag and the filing behind every value.

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