---
title: "What is the Capital Cash Flow? Is it the same with Free Cash Flow?"  
description: "What is the Capital Cash Flow? Is it the same with Free Cash Flow?"  
author: "Ronan Jone"  
published: 2018-02-28  
updated: 2023-07-06  
canonical: https://answers.mindstick.com/qa/35514/what-is-the-capital-cash-flow-is-it-the-same-with-free-cash-flow  
category: "business & finance"  
tags: ["business finance"]  
reading_time: 2 minutes  

---

# What is the Capital Cash Flow? Is it the same with Free Cash Flow?

## Answers

### Answer by Yashna Bawa

Capital [Cash Flow](https://www.mindstick.com/articles/23490/tips-for-better-cash-flow-management) (CapEx) is the cash that a company spends on acquiring or maintaining its long-term assets, such as property, plant, and equipment. This includes the cost of new purchases, [as well as](https://yourviews.mindstick.com/view/85029/why-sun-is-important-for-your-health-as-well-as-well-being) the cost of [maintaining and repairing existing assets.](https://www.mindstick.com/services/business-listing)

Free Cash Flow (FCF) is the cash that a company generates after paying its operating expenses and making capital expenditures. This is the cash that is available to [investors](https://www.mindstick.com/news/2413/with-collapse-of-ftx-genesis-alerts-investors-to-the-possibility-of-bankruptcy-without-new-funding), such as shareholders and debtholders.

The main [difference](https://yourviews.mindstick.com/view/84555/google-analytics-4-ga4-vs-universal-analytics-actual-difference) between CapEx and FCF is that [CapEx](https://www.mindstick.com/news/2371/micron-to-supply-fewer-memory-chips-in-2023-plans-fresh-capex-cuts) is a measure of how much money a company is spending on its long-term assets, while FCF is a measure of how much money a company is generating after paying its operating expenses and making capital expenditures.

![What is the Capital Cash Flow? Is it the same with Free Cash Flow?](https://answers.mindstick.com/questionanswer/9ac82cfb-3d8c-4afd-aa22-86b13df63662/images/4bb8d419-5a94-4903-ae3a-d61f384413e6.jpg)

Another difference between CapEx and FCF is that CapEx is a cash outflow, while FCF is a cash inflow. This means that CapEx reduces a company's cash balance, while FCF increases a company's cash balance.

CapEx and FCF are both important measures of a company's [financial health](https://answers.mindstick.com/qa/105700/how-to-assess-a-company-s-financial-health-before-investing). CapEx shows how much money a company is [investing](https://yourviews.mindstick.com/view/84946/the-pros-and-cons-of-investing-in-a-sports-franchise) in its future, while FCF shows how much money a company is generating from its current operations.

However, CapEx and FCF are not the same thing. CapEx is a measure of how much money a company is spending, while FCF is a measure of how much money a company is generating.

Here is an example to illustrate the difference between CapEx and FCF:

- A company has $100 million in revenue, $50 million in operating expenses, and $20 million in capital expenditures.
- The company's FCF is $30 million ($100 million in revenue - $50 million in operating expenses - $20 million in capital expenditures).
- The company's CapEx is $20 million.

As you can see, the company's FCF is $30 million, while its CapEx is $20 million. This means that the company is generating $30 million in cash after paying its operating expenses and making capital expenditures.


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Original Source: https://answers.mindstick.com/qa/35514/what-is-the-capital-cash-flow-is-it-the-same-with-free-cash-flow

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