This basic template can be used to calculate free cash flow (FCF). FCF is a measure of financial performance that represents the cash that a company is able to generate after accounting for expenses required to maintain and expand the business. Thus, the cash flow that is left once changes in working capital and capital expenditures are subtracted from operating cash flow is the FCF. Some investors prefer to use FCF to evaluate potential investments, rather than net income where earnings figures can be manipulated, because FCF provides a more accurate representation of a company's ability to generate cash. Furthermore, companies can use the FCF figure to determine how much cash the company will have available to distribute to equity holders.