Free cash flow (FCF) is a measure of a company's financial performance that represents the cash it generates after accounting for capital expenditures. It is calculated as operating cash flow minus capital expenditures.
FCF is important because it shows a company's ability to generate cash after spending money on growth and is a measure of a company's ability to pay dividends or make acquisitions. A positive FCF indicates that a company has enough cash to fund its operations, pay dividends and reinvest in the business. A negative FCF indicates that a company may have difficulty paying dividends or making acquisitions.