PDSnet Glossary

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Definition

<p style="text-align: justify;">The amount of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">cash</span> which a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">company</span> brings in from its <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">sales</span> or <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">turnover</span> minus <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">interest</span>, taxation and <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">dividends</span> paid, and excluding <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">income</span> from <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">investments</span>. This is used to calculate the company's <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">free cash flow</span>. That, in turn, is used to determine its <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">cash conversion ratio</span>.</p>