Free cash flow (FCF): what it is and how to read it

What it is

The cash left over after paying for day-to-day operations and investments (capex). It's what can go to dividends, share buybacks or paying down debt.

How to read it

Look at free cash flow over several years in a row. A strong year can come from postponed investment; what counts is the company generating cash consistently and growing.

Educational information; not a recommendation to buy or sell.