ACCOUNTING GLOSSARY
FCF
Free Cash Flow
Cash generated after operating needs and capital expenditures.
What does FCF mean?
Cash generated after operating needs and capital expenditures. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
FCF in context
A company producing $700,000 operating cash flow and spending $200,000 on equipment has $500,000 FCF.
Why it matters in financing
FCF can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related accounting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.