this device calls for the compensation of the vendor in a timely manner through a financial institution acting
as a third party.
This paper refers to an offset-free FCF as the “Corrected Free Cash Flow” (CFCF), since it would accurately
measure the periodic cash flow from and to those funding the firm, long and short-term lenders
included, providing an unbiased and more precise estimation of the firm and its individual investment
projects.
The paper proceeds as follows. Section 2 analyzes conceptual errors and implied distortions inherent to the
FCF offset. Section 3 tests for opportunities tomanipulate the offset-based FCF by comparison to the offset-free
CFCF. Section 4 offers a summary and conclusions