The firm's free cash flow (FCF) represents the amount of cash flow available to investors (shareholders and bondholders) after the firm has met all operating needs and after having paid for net fixed asset investments and net current asset investments.

Question

Quizplus · Accepted Answer

This statement is true. Free cash flow is the cash flow generated by a company after accounting for capital expenditures and working capital needs. It indicates the amount of cash available for distribution to investors, such as shareholders and bondholders, after all operating expenses and investments have been accounted for.

The Firm's Free Cash Flow (FCF) Represents the Amount of Cash