Free cash flow

USAGE SUMMARY

The phrase "Free cash flow" is correct and usable in written English.
It is typically used in financial contexts to refer to the cash generated by a company after accounting for capital expenditures. Example: "The company's free cash flow has increased significantly this quarter, indicating strong financial health."

✓ Grammatically correct

News & Media

Science

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

Free cash flow recently turned positive.

Forbes

Free cash flow approaching $900 million.

Forbes

Free cash flow from operations up 61%.

TechCrunch

Free cash flow was $3 billion dollars.

TechCrunch

(Free cash flow is net income minus net capital investments).

Forbes

Free cash flow is a measurement of financial flexibility.

Forbes

Free cash flow yield is one such measure.

Forbes

Free cash flow has fallen by 50percentt.

Forbes

Free cash flow was ahead 41% to $303 million.

Forbes

Free cash flow came in at a positive $881 million.

Los Angeles Times

But free cash flow is still rising.

The New York Times

Expert writing Tips

Best practice

Clearly define the time period you are referencing when discussing "Free cash flow" (e.g., quarterly, annually) to avoid ambiguity.

Common error

Don't assume that a high net income automatically translates to strong "Free cash flow". Remember to account for capital expenditures and changes in working capital, which can significantly impact the actual cash available to the company.

Linguistic Context

"Free cash flow" primarily functions as a noun phrase within financial contexts. It represents a specific financial metric used to assess a company's ability to generate cash after accounting for investments in its operations. Ludwig AI confirms its frequent usage in financial discussions.

Expression frequency: Very common

Frequent in

News & Media

47%

Formal & Business

27%

Science

26%

Less common in

Academia

0%

Encyclopedias

0%

Wiki

0%

Ludwig's WRAP-UP

"Free cash flow" is a commonly used noun phrase in financial contexts, representing a company's cash generation ability after accounting for capital expenditures. As Ludwig AI indicates, this phrase is grammatically correct and widely accepted. It is primarily used in news, business, and scientific domains. When using the phrase, remember that it differs from net income and that it is used by investors as a measure of financial health. Understanding its components is crucial for accurate interpretation. Related terms include "operating cash flow" and "discretionary cash flow".

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

Cash from operations less capital expenditures

Breaks down the components of free cash flow more explicitly.

Operating free cash flow

Specifies that the free cash flow is derived from operations.

Net operating cash flow

Highlights cash flow generated from the core business operations.

Adjusted free cash flow

Indicates that free cash flow has been modified to account for specific factors.

Discretionary cash flow

Emphasizes the cash flow available after essential expenses and investments.

Unlevered free cash flow

Adjusts free cash flow to exclude the effects of debt.

Net free cash

A simplified term referring to cash after all expenses and investments.

Available cash

Focuses on the cash that is readily accessible.

Cash available for distribution

Focuses on the cash that can be distributed to stakeholders.

Excess cash generation

Emphasizes the ability to produce more cash than needed for immediate obligations.

FAQs

How is "Free cash flow" calculated?

"Free cash flow" is typically calculated as net income plus depreciation and amortization, minus changes in working capital, minus capital expenditures.

What does it mean if a company has negative "Free cash flow"?

Negative "Free cash flow" can indicate that a company is investing heavily in growth, experiencing operational inefficiencies, or facing financial difficulties. It's important to analyze the reasons behind the negative cash flow in context.

What's the difference between "operating cash flow" and "Free cash flow"?

Operating cash flow reflects the cash generated from a company's normal business activities, while "Free cash flow" further subtracts capital expenditures, representing the cash available after investments in assets.

Why is "Free cash flow" important to investors?

"Free cash flow" is a key metric for investors because it indicates a company's ability to generate cash for reinvestment, debt repayment, dividends, and acquisitions, reflecting its financial flexibility and long-term sustainability.