Free cash flow

Free cash flow is the cash a business brings in from operations minus what it spends on equipment and buildings. Accounting shapes earnings; cash either arrived or did not. It funds buybacks and dividends, and Oracle spent $56 billion against $32 billion taken in over a year, paying for data centres by selling stock.

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In MochaLearnLearn how to read US earnings
  • BuybackA buyback is a company buying its own shares and cancelling them, so the same profit is spread over fewer shares and…
  • Order backlog (remaining performance obligations)An order backlog is money customers have committed but not yet been billed for, called remaining performance…
  • Payout ratioPayout ratio is the share of earnings paid out as dividends; $1 paid on $4 earned is 25%. Above 100% the dividend…
  • EBITDAEBITDA is earnings before interest, taxes, depreciation and amortisation: operating profit with debt costs and…
  • Dividend aristocratsDividend aristocrats are S&P 500 companies that have raised their dividend every year for at least twenty five years…
  • Dividend ETFA dividend ETF holds stocks picked for high or steadily rising dividends, such as SCHD or VYM. Its headline yield…

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