FCF
Free Cash Flow
Short definition
Free cash flow is cash left after the business has funded its investments. In loose usage it is OCF minus net capex; FCFF and FCFE split on financing items.
Detailed explanation
“Free” means cash that could go to dividends, debt paydown or the cash buffer — not that it is legally unrestricted (covenants, collateral, restricted payments). If maintenance and growth capex are not split, FCF looks structurally weak in a growth year.
FCF is narrower than OCF and a different cut from CFADS: CFADS is before debt service and after some mandatory capex. Using one label in three models breaks credit and valuation.
Why it matters for the CFO
Dividends, buybacks and de-levering are paid from this cash. Negative FCF may be growth investment or cash burn; ROIC and the cash buffer separate them. Valuation wants FCFF or FCFE, not a vague “FCF”.
How it is calculated
FCF ≈ İşletme nakit akışı − Net yatırım harcaması (tanım varyantları için FCFF / FCFE)
Variables in the formula
- FCF: Free cash flow (generic usage)
- OCF: Operating cash flow
- CapEx: Net capital expenditure
How to read it
Positive FCF means collections exceeded investment; destocking creates one-off FCF. In a high-rate regime FCF can be positive while a principal wall empties cash — you must step down to FCFE.
Numerical example
OCF 34 mn TL, net capex 25 mn TL → generic FCF ≈ 34 − 25 = 9 mn TL.
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Definitions are educational. They are not investment, credit or tax advice.