Free Cash Flow (FCF)
Also called FCF
The cash generated by a company’s operations after subtracting CapEx, representing the money available for debt repayment, dividends or reinvestment in the company.
In the room
FCF is what a DCF actually discounts, so it underpins the whole valuation. Being able to build it from EBITDA — taxes, D&A, working capital, CapEx — in the right order is a standard modeling-test task.