What is Free Cash Flow (FCF) and how do I calculate it? What is Free Cash Flow used for? What is the mearning of Free Cash Flow? What is the Free Cash Flow performance of Exxon Mobil, Facebook, General Electric and General Motors ? This Finance Storyteller video provides an in depth look at common and alternative definitions of Free Cash Flow (FCF), compares the profit view and the cash flow view of looking at a company’s performance, and analyzes the Free Cash Flow numbers published by Exxon Mobil, Facebook, General Electric and General Motors.

⏱️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.

Related videos:
Free Cash Flow case study: Netflix
https://www.youtube.com/watch?v=ikizI8dX1SA

Cash Flow Statement explained
https://www.youtube.com/watch?v=mZBjsIYrLvM

GAAP versus non-GAAP
https://www.youtube.com/watch?v=ewzlgnGtfmg

From revenue to profit to free cash flow in a business plan
https://www.youtube.com/watch?v=FC0ZODWFzpo

Cash From Investing Activities
https://www.youtube.com/watch?v=KVTaN_A2lTo

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!