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A business's free cash flow statement may differ significantly from its cash flow statement. The cash flow statement generally represents earnings before interest, taxes, depreciation, and amortization (EBITDA).
Cash flow and EBITDA focus specifically on the profitability of the company's actual business operations, independent of outside factors such as debt and taxes. Free cash flow, however, reports the net movement of cash in and out of the company.
To determine free cash flow, equity analysts add up all of a company's incoming cash and then subtract cash that a company pays out, including taxes and interest. The result tells you how much cash was left over or how short of cash the company was at the end of the fiscal period.Yahoo Finance - Cite This Source - This Definition
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