Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity and dividends.

Question

Quizplus · Accepted Answer

Free cash flow is calculated as operating cash flow minus capital expenditures required to maintain existing productive capacity. It is the cash available for corporate purposes, such as paying dividends, buying back stock, reducing debt, or investing in growth opportunities.

Free Cash Flow Is the Measure of Operating Cash Flow