Start with operating cash flow from the cash flow statement
Subtract capital expenditures
Formula: Free Cash Flow = Operating Cash Flow – Capital Expenditures
If needed, use: Free Cash Flow = Net Income + Non-cash Charges – Change in Working Capital – Capital Expenditures
Use capital expenditures from the investing section of the cash flow statement
Use operating cash flow from the operating section of the cash flow statement
Ensure both figures are from the same period
Adjust for recurring or one-time items if analyzing normalized free cash flow