Free cash flow is a critical metric in financial statement analysis — the statement of cash flow does not readily give you free cash flow, although it can be derived from the statement of cash flow. The method to do this is: net movement in cash balances plus or minus financing requirements, plus dividend payments and plus abnormal capital expenditure.

I submit that the International Financial Reporting Standards should make free cash flow a reporting requirement.

Emeritus Professor David RosenbergMuizenberg

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