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Adjustment in OCF for the changes in Fixed Assets:
FCF = OCF + Changes in Fixed Assets = OCF + ( Income from Fixed Assets sold - CAPEX ) |
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FCF = Net Income + Non-Cash Expenses |
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+ Changes in Working Capital |
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+ Changes in Fixed Assets |
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It is one of the most important measures of the Business profitability.
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The early investment periods can face negative FCF but as soon as Net Income is positive with a growing FCF trend then Business can be considered as future-promising.
See also
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Economics / Money / Currency / Cash / Cash Flow
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