(Net cash provided by operating activities of $8.3 million)-(Capital expenditures of $6.9 million) = Free cash flow of $1.4 million during the first nine months of 2020.Īnd from Nike's 2020 second-quarter filing under the consolidated statement of cash flows:.First, from Chevron's statement of cash flows from its third quarter 2020 public filing: Here are two real-world FCF examples from two different companies, Chevron and Nike. "Net cash from operating activities" (or something similar) can be found under the operating activities section, while "capital expenditures" and other qualifying expenses are listed under investing activities. This table is divided into three sections: operating activities, investing activities, and financing activities. To find these items in a company's quarterly or annual filing, look for the cash flow statement. If a company (such as many high-growth technology companies) has "capitalized software expenses" or regularly reports "business acquisitions" on its cash flow statements, then these cash outlays are also subtracted from "net cash from operating activities" to calculate FCF. Free cash flow = Net cash from operating activities-Capital expenditures.To determine FCF, subtract "capital expenditures" from "net cash from operating activities" (sometimes listed as "cash provided by operations" or a similar term). Image source: The Motley Fool What is free cash flow?įree cash flow is calculated using several items from a company's cash flow statement.
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