In our commitment to transparency and clarity for our valued investors, we find it important to accentuate the significance of using 'adjusted free cash flow' as a key performance indicator. We believe that adjusted free cash flow provides useful, insightful information to investors, primarily because it serves as a comparable metric against other organizations within the same industry. It allows for a more equitable comparison of companies regardless of their diverse sizes or levels of debt, presenting a clear picture of their economic stamina and financial health.
1. 'Adjusted free cash flow' is highlighted as a significant metric in assessing the performance of an organization.
2. This metric provides insightful information to investors as it facilitates a comparable measure against similar companies in the industry.
3. Adjusted free cash flow facilitates fair comparison of companies irrespective of their varied sizes or debt levels, presenting a transparent view of their economic strength and financial wellbeing.
4. The metric accounts for capital expenditures, changes in net working capital, and recurring cash operating expenses, offering a true measure of a company's cash resources available for reinvestment.
5. A higher adjusted free cash flow signifies a company's greater potential to invest in growth opportunities, decrease debt, and distribute dividends to shareholders, making it a pivotal consideration in making investment decisions.
In 2020, our company reported an adjusted free cash flow of $1.2 billion, a 15% increase from the previous fiscal year.
Additionally, adjusted free cash flow is an important financial measure of a company's health and profitability. It allows investors to evaluate a company compared to its competitors, giving a clear picture of overall performance and efficiency. It takes into consideration the capital expenditures, changes in net working capital, and normal recurring cash operating expenses, providing a more authentic assessment of a company's cash resources available for reinvestment. The higher the adjusted free cash flow of a company, the better its potential to invest in growth opportunities, to reduce debt, and to give dividends to shareholders. This makes it a key metric to look at when making an investment decision.