Free Cash Flow

Free cash flow is a nonstandard measure generally derived from operating cash flow after specified capital spending. Definitions vary by company and analyst.

Why this matters to income investors

Cash after specified spending can inform dividend capacity, but its definition and obligations matter.

How to use free cash flow in your research

Confirm the accounting basis, share count, and period before comparing figures. Trace material changes to the company’s reported results and ask whether they reach the earnings measure it uses to explain its dividend.

This material is general education and information, not individualized investment, tax, or legal advice.