Free Cash Flow
Free Cash Flow (FC) is calculated or derived by subtracting Capital Expenditures from Operating Cash Flow (OC). OC is also known as Cash Flow from Operations (CFFO). FC is generally the first line item found in a company's Cash Flow from Investing Section of its Cash Flow Statement and is considered to be the most conservative cash flow metric. Some consider FC as being too conservative since it can give a negative signal on extremely fast growing companies.
For example, Wal-Mart regularly generates negative free cash flow (FC) since they are aggressively making capital expenditures when they open new stores. However, Wal-Mart has generated 20 consecutive quarters of positive operating cash flow OC. Both FC and OC data can be found in a company's CASH FLOW STATEMENT, which is filed quarterly with the US Securities & Exchange Commission (SEC).