Free cash flow
Cash from running the business minus what the company spent on buildings and equipment: the cash actually left over.
Profit follows accounting rules; free cash flow is the money that really came in and stayed. A company can show a profit while spending more cash than it brings in, especially when it’s building a lot.
Examples from real companies
- Apple (AAPL): $9.25 per share over the last 12 months. Free cash flow is the cash left over after spending on buildings and equipment.
- Alphabet (GOOGL): $4.35 per share over the last 12 months. Free cash flow is the cash left over after spending on buildings and equipment.
- Meta Platforms (META): $11.16 per share over the last 12 months. Free cash flow is the cash left over after spending on buildings and equipment.
More investing words
Profit per share (EPS)P/E ratioBook value per shareCapital spending (capex)DividendDividend yieldPayout ratioShare buybackDilutionRevenue (sales)Profit marginDebtMarket capitalization10-K and 10-Q reportsStock split
For education only, not investment advice.