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Free Cash Flow
Free Cash Flow is becomong an increasingly popular method used by credit professionals to measure and assess a customer's financial health. Free cash flow is the amount of cash available to a company after all of its expenses have been paid. A company's net income may be high and increasing, but until creditors calculate free cash flow, they do not know if the company has actually generated money in a given year or not. The calculation is of free cash flow is straightforward. It is: Operating Cash Flow - Capital Expenditures.
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