InvestingWiki Por Dividendos
Free Cash Flow
"Cash a company generates after funding its investments. The real source of sustainable dividends."
Free cash flow (FCF) is the money a business generates from operations after paying operating expenses and the investments needed to maintain and grow the business (capex). It is, literally, the cash left free to reward shareholders, reduce debt or fund acquisitions.
For dividend investors it is a central metric: sustainable dividends are not paid out of accounting profit, they are paid out of cash. A company can report profits and still fail to generate enough cash to cover its dividend without borrowing.
Free cash flow formula
The most common calculation:
Free cash flow = operating cash flow − capexFor example, if a company generates 1,000 million in operating cash flow and invests 400 in capex, its free cash flow is 600 million. If it pays 450 million in dividends, the payment is comfortably covered; if it pays 700, it is distributing more cash than it generates.