In finance, free cash flow (FCF) is the total cash that a company creates after subtracting capital expenses. It is the difference between the operating cash flow and capital expenditure. Capital expenditures like marketing costs, payroll, paying interests, taxes, rent, etc.
If the company has more free cash flow that means the company can pay down its debts, paying more dividends to its shareholders, and have more growth opportunities.
If the free cash flow of the company is decreased and if the company is investing in its growth that is also not bad for the company.
The formula for calculating free cash flow, FCF per share and FCF yield is as follows:
First calculate, free cash flow = operating cash flow - capital expenditures
after, free cash flow per share = free cash flow / number of outsanding shares
and, free cash flow yield = free cash flow per share / stock price
What can you do with CD Calculator?
- It helps to calculate the value of free cash flow and helps to measure the growth of the company.
- Users can see the accurate value of the free cash flow, FCF per share and FCF yield. And also can see the free cash flow value in words.
- This calculator helps to share your calculations by URL.