Definition

Free cash flow walk

The bridge from accounting earnings to the cash the business actually generates: start at net income, add back non-cash charges, absorb working-capital swings to reach operating cash flow, then subtract capital expenditure. What remains funds debt, buybacks, dividends, and acquisitions.

Formula

FCF = Operating cash flow − Capital expenditure
Walk: Net income → + D&A → ± working-capital change → ± other non-cash → CFO → − CapEx → FCF

Drivers — what actually moves it

Earnings quality: the closer CFO tracks net income over time, the cleaner the earnings.
Working capital: growth absorbs cash into receivables and inventory; unwinding releases it.
Capital intensity: CapEx requirements determine how much operating cash converts to free cash.
Stock-based comp: added back as non-cash inside CFO, yet a real cost to owners via dilution — read it explicitly.

Where to find it in the filing

Cash flow statement (Consolidated Statements of Cash Flows). 10-K Item 8 — operating activities section top-to-bottom is the walk; CapEx sits in investing activities.

XBRL concepts Echelon grounds to: NetCashProvidedByUsedInOperatingActivities · PaymentsToAcquirePropertyPlantAndEquipment · DepreciationDepletionAndAmortization

Prove it on a model

Sector caveats — where this breaks

Financials' operating cash flows are dominated by balance-sheet movements (loans, deposits) — the FCF construct does not transfer.
Capitalized software and finance leases move real spending out of the headline CapEx line — check the investing section's detail.

Working capital EBITDA Capital expenditures

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.