Free Cash Flow - Differentiate between ending cash balance and free cash flow



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Hi, how can we differentiate between ending cash balance and free cash flow..we deduct only capex n nt consider cash from financing activity. Then free cash flow is really a free? because if there is loan int payment then that will become les again.

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Anup, Ending Cash Balance is a Balance sheet item. It indicates how much cash the company has in its bank account.

Free Cash flow is a number that is calculated using income statement items. It indicates how much cash the company generates after paying off all its expenses. There are 2 kinds of FCF - levered and unlevered.

In levered free cash flow interest expense is deducted. In unlevered free cash flow interest expense is not deducted.

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