Fiducia TogetherFree cash flow
Cash generated after everything needed to keep operating. What is actually available.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
Free cash flow is operating cash flow less capital expenditure — the cash left after maintaining the asset base.
Why it matters
It is closer to what an owner can actually take out or reinvest than profit is, and buyers and lenders look at it because it is harder to flatter.
What it looks like in practice
It differs from EBITDA precisely by the things EBITDA ignores: tax, interest and the capital spending the business actually needs.
What to watch out for
A business with strong EBITDA and weak free cash flow is usually one with heavy capital requirements or a working capital problem.
Where to get proper advice
Your accountant, who can produce most of these from data they already hold.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.