BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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cash flow from assets
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remaining cash free to distribute to creditors and owners of the firm
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cash that a company generates to operate the company
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All of the above
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Detailed explanation-1: -Free cash flow is the cash flow available for the company to repay creditors or pay dividends and interest to investors. Some investors prefer to use FCF or FCF per share over earnings or earnings per share as a measure of profitability because these metrics remove non-cash items from the income statement.
Detailed explanation-2: -Free cash flow (FCF) is the cash a company generates after taking into consideration cash outflows that support its operations and maintain its capital assets. In other words, free cash flow is the cash left over after a company pays for its operating expenses (OpEx) and capital expenditures (CapEx).
Detailed explanation-3: -Free cash flow (FCF) is the money a company has left from revenue after paying all its financial obligations-defined as operating expenses plus capital expenditures-during a specific period, such as a fiscal quarter.
Detailed explanation-4: -#3 Free Cash Flow (FCF) FCF gets its name from the fact that it’s the amount of cash flow “free” (available) for discretionary spending by management/shareholders. For example, even though a company has operating cash flow of $50 million, it still has to invest $10million every year in maintaining its capital assets.