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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Free Cash Flow

Definition:

Companies generate earnings. But often a dollar of earnings is only 70 cents or less of free cash flow. Why? Because a lot of a company's profits have to be redeployed into capital expenditures like a new bottling plant or 30 year distribution licenses in Brazil.