Free Cash Flow explained
133,477
Published 2016-12-07
⏱️TIMESTAMPS⏱️
00:00 Introduction to Free Cash Flow
00:56 Free Cash Flow in the financial statements
01:25 Free Cash Flow definition
02:05 Free Cash Flow calculation
03:54 Free Cash Flow example
05:06 Profit vs Free Cash Flow
07:04 Free Cash Flow comparison between companies
10:25 Free Cash Flow and valuation
11:46 Free Cash Flow summary
Free Cash Flow is usually defined as:
Cash flow not required for operations or reinvestment
Cash flow available for distribution among all the securities holders (debt or equity) of an organization
Calculation: Cash From Operating Activities (CFOA) minus Capital Expenditures
Unfortunately, the Free Cash Flow definitions that companies use are not always the same. Some stay very close to what you see here, but we will also see some alternative definitions along the way in this video.
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Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!
All Comments (21)
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Enjoyed the video? Then please subscribe to my channel, and watch the follow-up video on how to go from revenue to profit to free cash flow in a business plan: https://www.youtube.com/watch?v=FC0ZODWFzpo
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Really just one of the best finance YouTube channels out there. Crystal clear explanations and real-world examples.
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Just started studying for My CFA and this video helped me with understanding conceptually what FCF is. Thanks...Great Video
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I am fortunate to have discovered finance story teller videos . Thank you for explaining with clarity.
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Thank you that helped a lot, especially when you showed the tables and the metaphors and examples are great! Thanks.
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Superb video in all apsects: pleasant voice, clear explanations supported with examples from the real world.
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Hello, thank you so much for the video. Your videos are my first-choice when i dont get an accounting term. You explain it so well. Keep helping everyone! :D
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AMAZING explanation. Thanks !
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Muito Obrigado. Aula bastante clara e objectiva!
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One of the best explanations i have heard
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Thank you for doing this, you're helping people more than you know. Godbless you more.
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Really love your video! You explain key concept very clear with real life example! It's really great!
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Great video. Very clearly explained in a reasonable amount of time. Much appreciated!!
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Excellent video, short but to the point!
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Thanks for the video. Actually we discussed the same topic today during a training for non finance employees. I will forward the link to them for reference.
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Thank you for this!
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Love your videos man thanks. By the way any stock market investor should compare balance sheet and cash flow statement, in order for them to know the effectiveness of management.
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Very helpful, thank you for this!
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very informative explained in the easiest of ways.....kudos, keep it up
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Excellent explanation. Thanks
