Free cash flow
AccountingOperating cash flow minus capital expenditure.
In plain terms
The money genuinely available to owners after keeping the lights on.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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FCF yield
Fundamental analysisFree cash flow divided by market capitalisation.
In plain terms
The cash return on buying the whole company. Much harder to manipulate than earnings.
Dividend
Market basicsCash a company distributes to shareholders out of its profits, received by whoever owns the share before the ex-date.
In plain terms
Sustainable only when covered by free cash flow — a company borrowing to maintain its dividend is buying goodwill with someone else's money. It is now taxed in your hands at your slab rate.