What does 'free cash' mean?

Free Cash Flow, or FCF, refers to the cash flow or equity of a company after meeting all its debt and financial obligations. It provides insight into the cash a company generates or retains after considering necessary working capital and capital expenditures.

In simpler terms, FCF represents the available cash for repaying creditors and rewarding investors through interest and dividends. This cash can also be employed to reduce debt, expand the business, and more. Essentially, FCF serves as a valuable metric for assessing a company’s financial well-being and performance.