free cash flow
Noun
Meaning
free cash flow (plural free cash flows)
(business) A measure of a company's financial performance, calculated as Net income plus depreciation and amortization, less changes in working capital, less capital expenditure.
Free cash flow can be very negative for profitable, fast-growing businesses and very positive for unprofitable, declining ones.
Examples
There could be no better time to fully integrate Infinity with Viacom's tremendous portfolio of assets. Infinity is performing at record levels and continues to generate a tremendous amount of free cash flow that will now fully benefit Viacom.
Between 1979 and 1989, it was estimated that there were over 2,000 leveraged buyouts valued in excess of $250 billion Opler, T. and Titman, S. "The determinants of leveraged buyout activity: Free cash flow vs. financial distress costs."
Free cash flow should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Free cash flow generated during the first nine months of 2020 improved $83.4 million year-over-year to $143.7 million, from $60.3 million a year ago, due to an increase in cash flow from operations and a reduction in capital expenditures.
Free cash flow is not a measure of financial performance in accordance with GAAP, and we believe items excluded from net cash provided by operating activities are significant to the reader in understanding and assessing our results of operations.
Free cash flow increased by 6.9 percent year-on-year to EUR 7.0 billion.