Answer:
The Free Cash Flow (FCF) is the cash the company generates after its expenses and capital expenditures have been deducted.
Explanation:
The Free Cash Flow is important because it helps to analyze the performance of the company as it allows to determine the organization's ability to pay debt and dividends.
The formula to calculate Free Cash Flow is:
FCF= Net income + amortization + depreciation + deferred taxes – capital expenditures – dividends
To improve the FCF, a company could increase the sells, raise the price, decrease the costs, lower tax rates, reduce the working capital, get better terms from suppliers, improve the inventory (maintain an optimal level of inventory).