Which term describes money available for a company to invest or distribute without harming its future operations?

Free cash flow is the term that describes the money available for a company to invest or distribute without negatively impacting its future operations. This financial metric is crucial because it indicates how much cash a company generates after accounting for capital expenditures required to maintain or expand its asset base.

When companies have positive free cash flow, it means they have sufficient funds to execute growth opportunities, pay dividends, or reduce debt, all while maintaining the operational integrity of the business. This provides a clear picture of the company’s ability to generate additional value for shareholders and invest in future projects without jeopardizing existing operations.

In contrast, total revenue refers to the overall income generated from business activities, but it does not account for expenses and capital expenditures. Net income, while indicative of profitability, also encompasses a range of non-cash factors and obligations which do not necessarily reflect the actual cash available for distribution or investment. Working capital, which measures a company's short-term financial health, focuses on current assets and liabilities, but it does not provide insight into cash generation after investments. Thus, free cash flow uniquely captures the cash available to support the company’s strategic goals without putting ongoing operations at risk.