Definition for : Free cash flow

Free Cash flow is the difference between Operating cash flow and capital expenditure net of Fixed assets disposals. Free Cash flow can be calculated before or after tax. It also forms the basis for some company valuation techniques. If free Cash flow turns negative, additional Financial resources will have to be raised to cover the company's cash requirements.

(See Chapters Chapter 2 Cash Flows and 3Chapter 2 Cash Flows of the Vernimmen)

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