FCF is an assessment of the amount of cash a company generates after accounting for all capital expenditures, such as buildings or property, plant and equipment. The Free Cash Flow shows the amount of cash generated without any obligations attached. The excess cash can be used to expand production, develop new products, make acquisitions, pay dividends and reduce debt.
Usually FCF refers to FCF to the firm
FCF = EBIT (1-tax rate) + (depreciation) + (amortization) – (change in net working capital) – (capital expenditure).
