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Cash & working capital
Free cash flow
Operating cash flow less capital expenditure — the cash the business generates after maintaining and growing its assets, available to repay debt, pay owners, or build reserves.
Owned by: Senior analystTest band: Senior analyst
The formula
FCF = Operating cash flow − Capex
In practice
The number that survives every accounting argument. A business with growing EBITDA and shrinking free cash flow is buying its growth.
The kind of thing the test asks
- Operating cash flow $300k, capex $120k, debt repayment $50k. Free cash flow is…
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