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Free cash flow is money in the bank. if that grows, you or any company is by default alive. The higher the free cash flow, the more growth the company can finance from operations. Profitability is something different. A company can be profitable and cash flow positive (something Amazon is and always was), non-profitable and cash flow positive (not necessarily bad if the company grows, because it is fair to assume losses come from growth), profitable and cash-negative (which is a problem as operations need to be financed by debt, even small market hick-ups impacting profits can kill those companies) or non-profitable and cash negative (those companied are usually dead already).

Important to note, that is free cash-flow from operations, not including cash flow from financing rounds and the like.



Why is that called free cash flow? Shouldn't it be just called 'cash'?


Cash is the result of cash flow. Free, because tgat is "surplus" created by a business that can be used freely for whatever.




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