Formula

Free Cash Flow Formula: An Insight into Cash Flow Statements

6 min read

Free Cash Flow (FCF) is a financial statement formula used to measure a company’s financial health. It is calculated by subtracting the total operating expenditure, such as wage costs and raw materials, from the total cash generated by the company during a stated period. FCF can be used to determine the amount of cash that a company generates that is available to be reinvested in the business or paid out to shareholders in the form of dividends. This metric can also be used by investors to evaluate potential investments in the forex market, where FCF can be used to determine the profitability of various currencies.