FCF
Business & Finance abbreviation · Finance
| Stands for | Free cash flow |
|---|---|
| Categories | Business & Finance |
FCF stands for Free cash flow, a finance abbreviation.
Cash a company generates from operations after paying for the capital expenditures needed to maintain and grow its asset base, commonly calculated as operating cash flow minus capex. It shows how much cash is available for dividends, buybacks, debt repayment or acquisitions.
Example: Despite a GAAP net loss, the company produced $310 million of FCF thanks to lower capex and faster customer payments.
Usage notes
FCF is not defined under GAAP or IFRS, so companies calculate it differently, and reconciliation tables in earnings releases show the method used. Valuation practitioners distinguish FCFF (to the firm) from FCFE (to equity). FCF yield, free cash flow divided by market value, is a common valuation ratio among investors.
Related abbreviations
More finance abbreviations
- ECM – Equity capital markets
- ERP – Equity risk premium
- ESOP – Employee stock ownership plan
- EV – Enterprise value
- EV/EBITDA – Enterprise value to EBITDA
- EVA – Economic value added
- FCFE – Free cash flow to equity
- FCFF – Free cash flow to the firm
- FICC – Fixed income, currencies and commodities
- FP&A – Financial planning and analysis
- FV – Future value
- GP – General partner