# FCF — Free Cash Flow

Operating cash flow minus capital expenditure.

## Definition

Free cash flow is the cash a business generates after paying to maintain and grow its productive asset base. It's the cash genuinely available to repay debt, pay dividends, repurchase shares, or fund acquisitions.

## Formula

Operating Cash Flow − Capital Expenditure

## Why it matters

FCF is the single most-cited measure of a business's financial health among long-term investors. Unlike earnings, FCF can't be juiced by accounting choices around depreciation, accruals, or revenue recognition.

## How Standard Equity uses it

Used to compute FCF margin, FCF per share, FCF yield, and the FCF-to-Net-Income quality ratio.

## The metric

| Category | Cash Flow |
| -------- | --------- |
| Unit     | $M        |

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