Free Cash Flow (FCF)

FCF = Cash Flow from Operations − Capital Expenditures. It's the cash the business generates after maintaining its existing asset base — available for dividends, buybacks, debt repayment, or acquisitions.

Many analysts prefer FCF to net income because earnings can be inflated by non-cash items (depreciation policies, deferred-revenue recognition). Cash is harder to manipulate.

FCF Yield = FCF / Market Cap is a valuation tool — a 5%+ FCF yield often signals a mature, cash-rich business.