Under review

SA's definition of "Free Cash Flow"?

JerryNorcia 4 years ago in Website updated by Beersheba Research 11 months ago 5

Seeking Alpha's definition of "Free Cash Flow" as found on the "Profitability" screen under the Data section states:

"FCF = Cash from Operations - Property Plant & Equipment - Dividends". But does "Dividends" include both Preferred Dividends and Common Dividends or just Preferred Dividends?

Your FCF definition does not make sense. What do dividends have to do with Free Cash Flow?

It isn't my definition; it is Seeking Alpha's ... which I don't think is correct. see my initial post above.

Under review


The correct definition of Levered Free Cash Flow from Capital IQ is:

EBIT * (1 - Tax Rate of 37.5%)
+ Interest Expense * (1 - Tax Rate of 37.5%)
+ Depreciation & Amortization
+ Amortization of Deferred Charges
+ Capital Expenditure
+ Sale (Purchase) of Intangible Assets
+ Total Stock-Based Compensation
- Change In Net Working Capital.

We have updated the definition on the site.

Great. Thanks for issuing this very complete definition of FCF and, most importantly, making the correction on the SA website.


Looks like I may be 2 years behind this discussion, but isn't levered free cash flow = Cash flow from operations less capital expenditures?