Analysts calculated that Starbucks total free cash flow for the months ended in June 2017 was $763 million. Its net income for the months ended in June 2017 was $692 million. From class, what is the definition of free cash flow? If you are considering an investment in SBUX, should you be more interested in free cash flow or net income?
Free cash flows, is the cash left over in the company after paying for all the operating expenses, capital expenditures and working capital expenses.
As an investor i would be more interested in the Free cash flows that a company is generating, the reasons being
Since, Starbucks is generating higher cash flows i would be willing to invest in the company as the company's prospects looks positive.
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