Free cash flow
Free cash flow is the cash a business has left once it has met its operating costs and taxes and paid for capital spending: cash from operations minus capital expenditure.
The usual calculation takes cash generated by operations, straight from the cash flow statement, and subtracts capital spending: free cash flow = cash from operations minus capital expenditure. Variants move the line. Free cash flow to equity subtracts debt repayments and adds new borrowing, to isolate what shareholders could actually take. Free cash flow to the firm goes the other way and adds interest back, net of the tax it saves, because cash from operations is usually struck after interest has already been paid. Check which one a published figure means before setting it against another company's.
This is money that can go anywhere: repaying borrowings, paying dividends, buying back shares, funding an acquisition, or simply building the cash balance. It is also what valuation models discount back to the present, which is the calculation the net present value calculator performs on a stream of future cash.
Profit and free cash flow answer different questions. Profit includes non-cash charges such as depreciation and counts revenue when it is earned rather than when it is collected. Free cash flow counts only money that actually moved. The trap is judging a single year on its own, because capital spending is lumpy and easy to postpone, so an unusually strong year is sometimes a year of deferred maintenance. Several years read together, alongside EBITDA and the movement in working capital, is the view that holds up.