Free cash flow is the cash a company generates from operations after deducting capital expenditures. It represents the cash available for dividends, share buybacks, debt repayment, acquisitions, or any other discretionary use. FCF is widely considered the most important measure of a company's financial flexibility because it reflects actual cash rather than accounting profit.
Free Cash Flow = Operating Cash Flow (TTM) − Capital Expenditures (TTM)
GeminIQ subtracts TTM capex from TTM operating cash flow, both from the cash flow statement in SEC filings.
A: Net income includes non-cash items and does not account for the capital expenditures needed to maintain or grow the business. A company can report positive net income while spending more on capex than it generates in operating cash — meaning it is actually consuming cash despite being "profitable." FCF strips all of that away and shows the true cash surplus.
A: FCF should be positive and growing for a mature company. Negative FCF is acceptable for high-growth companies investing heavily in capacity, but it should be funded by existing cash or reasonable debt rather than continuous equity dilution. The most useful metric is the FCF margin (FCF/Revenue), which shows how efficiently the company converts revenue to free cash.
A: Capex definitions are the primary source. Some platforms include software development costs or acquisitions. GeminIQ uses Payments to Acquire Property Plant and Equipment from the cash flow statement as the primary capex input.