Free cash flow: what it is and how to read it
Free cash flow is the cash the business generates after paying for what it must invest to keep running (plants, stores, equipment). It is the money really available for dividends, buybacks, paying down debt or growth.
How it is calculated
Free cash flow = operating cash flow − capital expenditure (capex).
How to read it
Many investors prefer it to earnings because it is harder to dress up: either cash comes in or it does not. A company reporting profits but no free cash flow for years deserves a close look.
Free cash flow in the MeridIAn ranking
Of the 1,640 companies with data (excluding banks, insurers and real estate), 1,364 generate positive free cash flow: 83%.
By sector
| Sector | Positive FCF | Companies |
|---|---|---|
| Basic Materials | 81% | 138 |
| Communication Services | 93% | 100 |
| Consumer Cyclical | 86% | 222 |
| Consumer Defensive | 98% | 123 |
| Energy | 83% | 100 |
| Healthcare | 79% | 213 |
| Industrials | 88% | 377 |
| Technology | 87% | 275 |
| Utilities | 30% | 92 |
For example: NVIDIA, $41.8B; Apple, $107.7B; Alphabet, $22.7B; Inditex, €6.5B.
What to watch out for
A year of heavy investment for growth can make it negative without being a bad sign. The trend is what matters.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.