how important is fcf 
free cash flow is an important financial metric because it represents the actual amount of cash at a company s disposal a company with consistently low or negative fcf might be forced into costly rounds of fundraising in an effort to remain solvent if a company has enough fcf to maintain its current operations but not enough fcf to invest in growing its business that company might eventually fall behind its competitors for yield oriented investors fcf is also important for understanding the sustainability of a company s dividend payments as well as the likelihood of a company raising its dividends in the future the bottom linechecking a company s free cash flow fcf and especially checking the trend of free cash flow over time can be useful to investors considering a company s stock and to others such as bankers considering loaning the company money shareholders can use fcf minus interest payments as a gauge of the company s ability to pay dividends or interest bankers can consider fcf as a measure of the company s ability to take on additional debt luckily nobody has to calculate this number manually most financial websites provide a summary of fcf or a graph of fcf s trend for publicly traded companies correction nov 10 2022 an example in a previous version of this article classified customer payments as outflows when they are in fact considered inflows 