Advice and Examples: What is free cash flow and what does it tell about a company's finances? For a Finance Manager Interview Question.
What is free cash flow and what does it tell about a company's finances?
How to Answer
Free Cash Flow (FCF) is the cash a company generates from operations less expenditures for capital expenditures and other assets. FCF is a measure of profitability, and it tells investors how much cash is available for a company to repay creditors or pay dividends. At many organizations, a Finance Manager may be required to forecast and report on free cash flow. Even if not, it's still important for the candidate to know what free cash flow is.
Written by Brian Schuchart on January 1st, 2021