Free Cash Flow
Also called FCF
The cash a business generates after covering operating costs and the capital spending needed to keep running. What is actually left to reinvest, repay, or bank.
Free cash flow = operating cash flow - capital expenditure
Why it matters
Free cash flow is the purest sign of a self-sustaining business, it needs no outside money to keep going. Reaching positive free cash flow is what ends the dependence on fundraising.
For example
A company generates 3 crore of operating cash and spends 50 lakh on equipment, leaving 2.5 crore of free cash flow to reinvest or bank.
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Also in Starting Up
See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.
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