Free Cash Flow (FCF)

Free Cash Flow is the actual cash a company generates after paying for operating expenses and capital investments—think of it as money left over that the business can spend however it wants. You'll see FCF mentioned constantly in stock research because it's more honest than reported profits; companies can manipulate earnings through accounting tricks, but cash is cash. A company with strong FCF can pay dividends, buy back shares, or invest in growth, while weak FCF is a red flag even if profits look good on paper. For example, TechCorp might report $100 million in earnings but only have $20 million in free cash flow after upgrading factories—that's the real financial picture investors care about.