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FCF = OCF + Changes in Fixed Assets = Net Income + Non-Cash Expenses - ( Closing Working Capital - Opening Working Capital ) + ( Income from Fixed Assets sold - CAPEX )
It is one of the most important measures of the Business profitability.
Positive FCF shows a clear profitability of the Business.
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 promising.
See also
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Business / Business Administration / Financial Management / Financial Accounting
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