Individual Stocks

Price / Earnings Ratios and Other Calculations

How do I compute a company’s free cash flow?

You can compute a company’s free cash flow by looking closely at its financial statements, specifically the cash flow statement and balance sheet. In these sections, you can see a line item called Cash Flow from Operations (or operating cash flow). Subtract from this amount any capital expenditures made during the reporting year, and you will see the company’s free cash flow.


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