# Free cash flow

> Operating cash flow less capital expenditure, both as reported. One formula, used for every company.

Updated Oct 17, 2026.

Free cash flow is the cash a company's operations generated after paying for the physical assets it needs to keep running and growing. It is the cash available to repay debt, pay dividends, buy back shares or make acquisitions.

## Formula

```
free cash flow = operating cash flow − capital expenditure
```

Both inputs are as reported: [operating cash flow](/glossary/operating-cash-flow) and [capital expenditure](/glossary/capital-expenditure) for the same period. Capital expenditure is a positive amount spent, so it is subtracted. [TTM](/glossary/ttm) free cash flow is the sum of the last four quarters.

## Why it may differ from the company's figure

Free cash flow is not defined by accounting standards. When a company quotes it in an earnings release, it is a [non-GAAP measure](/glossary/non-gaap-measure) and the company chooses the definition: some subtract capitalized software, lease payments or the cash cost of acquisitions; some add items back. Listed uses the one formula above for every company, so figures are comparable across companies, but they will not always match what a company says.

## Reading it

Negative free cash flow is not a verdict on its own. A young company investing heavily, or a mature one in a large build-out year, can have negative free cash flow for a while. Look at several years and at what the cash was spent on.

## When it says "not reported"

Either input is not reported for the period.

## Related terms

- [Operating cash flow](/glossary/operating-cash-flow.md)
- [Capital expenditure](/glossary/capital-expenditure.md)
- [TTM](/glossary/ttm.md)
- [Non-GAAP measure](/glossary/non-gaap-measure.md)

All terms: [/glossary.md](/glossary.md)