Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Actually, this question is relevant for this board, as it has less to do with HG and more to do with investment jargon.

I *believe* OE is the same as Free Cash Flow (FCF). The intuition behind FCF is this: how much cash does a business generate from its normal course of operations, less what it must invest in equipment to keep those operations running?

The simplest way to calculate FCF is to take Cash Flow from Operations and subtract Capital Expenditure.

FCF = CFO - Capex

Both of these numbers are found on the Statement of Cash Flows.
Some folks prefer to calculate FCF by starting with Net Income:

FCF = (NI + Depn - NWC) - Capex

I hope this helps.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.