What is Free Cash flow | Advantages & Disadvantages of Free Cash flow | Free Cash flow explained
From this video you will learn What is Free Cash flow explained and how it works, Understanding of Free Cash flow, Advantages & Disadvantages of Free Cash flow in stock market for beginners in english. Free Cash Flow: Free cash flow is the amount of cash a business has left over after it has paid for everything it needs to continue operating which includes building, equipment, payroll, taxes and inventory. In other words, it can be referred to as the cash left over after a company pays for its operating expense and capital expenditure also known as CAPEX. The free cash flow may be of use to equity holders, debt holders, preferred stockholders and convertible security holders when they want to see how much cash can be extracted from the company without causing any issues to its operations. FCF = CFO – Capex where, FCF = Free Cash Flow CFO = cash flow from operations Capex = capital expenditure including maintenance capex and capital work in progress. Advantages of FCF: It allows the investors to have a close, intrinsic stock value which helps the investor in making a better decision FCF is a trustworthy measurement that eliminates the guesswork because the reported earnings can be evaluated with more accuracy. It helps the investors in understanding the real value of the company and if the stock price of the company is over or under valued by the market right now. Disadvantages of FCF: Unless a certain percentage of risk is built into the equation, free cash flow is not a one solution for all. FCF only works when a company is operating with 100% transparency. If there are questions regarding the cost trends, sales practices and other information which effect the free cash flow then there is too much uncertainty to use this as a tool for the investor. Although FCF is a good measurement, the investor needs to make a few assumptions on what will happen in the future and the accuracy of these projections if the measurement is correct or wrong. #FreeCashflow, #FCF, #Simplyinfo, ----------------------------------------------------- Music: Ukulele - Bensound https://www.bensound.com ....... Our Mantra: Information is Opportunity. Knowledge is Power. Be Informed - Be Powerful! SUPPORT US: SUBSCRIBE / LIKE / SHARE / COMMENT :) Subscribe Link: https://goo.gl/qbyzFb ....... CONNECT US: Website: http://www.simplyinfo.net Facebook: / simplyinfo.net Twitter: / simplyinfo9 YouTube: / simplyinfo9 Slideshare: https://www.slideshare.net/SimplyInfo9 Pinterest: / simplyinfo9 Instagram: / simplyinfo9 YouTube Subscribe Link: https://goo.gl/qbyzFb ....... OTHER PLAYLISTS TO EXPLORE: Games & Sports: https://goo.gl/uTXRWB Jobs & Career Info: https://goo.gl/cbCDXy Business Management: https://goo.gl/1sDjfW Information Technology: https://goo.gl/nWYpK8 Physics Concepts: https://goo.gl/FnLmes Education & Learning: https://goo.gl/54TR8A Filmmaking Concepts: https://goo.gl/RQL5qn Psychology Concepts: https://goo.gl/oYNNKA Indian Law Concepts: https://goo.gl/m98pWn Economics Concepts: https://goo.gl/yymX98 ....... About Simplyinfo.net: We provide the best info bytes videos in a very simple and effective way to learn, to revise and to master micro-content information. We simplify information in a wide variety of categories. PLEASE SUBSCRIBE to the channel for support. For any kind of courses / tutorials - Ask in the Comments. Visit our website: http://simplyinfo.net/ for all kinds of Courses and Info Videos. Contact Us: [email protected] Be Blessed with Love, Health & Happiness. Cheers & Have Fun :) Team SimplyInfo.net P.S. CLICK BELOW LINK TO SUBSCRIBE FOR UPDATES. SUBSCRIBE LINK: https://goo.gl/qbyzFb
