Free cash flow refers to the cash flow that a company creates through its original business activities. “Free” is used in the sense that companies can distribute freely to providers of funds such as bond holders, financial institutions, shareholders and others. It represents money that companies can freely use. Free cash flow is calculated by subtracting the investment cash flow allocated to capital investment and corporate acquisition from cash flow related to operating activities earned from core business. In order to know such numbers, it is necessary to read the cash flow statement disclosed by the company, and it is necessary to calculate by themselves. The amount of free cash flow is often regarded as important for deciding the evaluation of the company itself. So companies that do not have free cash flow need attention. Free cash flow is growing, and companies with no capital investment or working capital can say that they are doing an ideal business.

To the point where they want to sell the company, it is a question of how much cash flow can be generated when considering M & A. This is because businesses that do not generate cash are not attractive because they cost a lot of capital investment even if they do M & A at a company. For example, Japanese mobile phone business is a stock business that allows you to use it on a sustainable basis once you sign up with the user, so Japanese mobile phone carriers can be said to produce a lot of free cash flow every year. Therefore, we can continue to generate free cash flow from now on, so it is stable since there is little risk of being forced to sell the company. To the contrary, business that can provide stable free cash flow continuously like mobile phone business will be an attractive company as subject of M & A. Actually, some Japanese mobile phone carriers have M & A mobile phone carriers in the United States where the interest-bearing debt is huge. However, due to the fact that existing business generates free cash flow, the interest-bearing debt Even if there were a lot, loans were received from financial institutions and there was also a case where M & A succeeded.