Free cash flows is a measure of financial performance of the entity and is calculated as net income plus depreciation and amortisation expense less change in working capital ( current assets - current liabilities) less capital expenditure.
Operating cash flow is alike free cash flow except it does not exclude capital expenditure.Both are useful in making comparisons amongst industries and assists in calculating financial ratios. Higher the operating and free cash flow, higher the appreciation in value of shares of the company.
Get Answers For Free
Most questions answered within 1 hours.