In corporate finance, what cash remains after a company pays for capital expenditures?

In corporate finance, the cash remaining after a company pays for capital expenditures is called free cash flow.

A common calculation starts with operating cash flow and subtracts capital expenditures. The resulting amount indicates cash potentially available for debt repayment, dividends, share buybacks, acquisitions, or reinvestment beyond required asset spending.

Free cash flow is not identical to accounting profit. A profitable company can report weak or negative free cash flow if it is building factories, buying equipment, or investing heavily in working capital. Conversely, temporary reductions in investment can make free cash flow look strong even when long-term growth is slowing.

Definitions vary. Some analysts use unlevered free cash flow, which measures cash available to all capital providers before interest and debt payments. Others use levered free cash flow, which reflects cash available to equity holders after financing obligations.