Understanding Free Cash Flow: The Profit's Residue

Free cash flow represents the amount of money that remains after a company has covered all its operational expenses and capital expenditures. This includes costs associated with employee salaries, logistics, and various business-related expenses, as well as investments in assets like warehouses and vehicles. The significance of free cash flow lies in its reflection of a company's profitability, effectively indicating the surplus capital available for reinvestment, debt reduction, or distribution to shareholders. In the case described, the company retains $11 billion in free cash flow, highlighting its robust financial health.