Free cash-flow is a measure of the cash a company is able to generate after spending on expanding its asset base. Essentially, this is the cash-flow available to distribute amongst all the contributors of capital (debt holders, equity holders, etc.). The availability of sufficient FCF allows a company to pursue profitable opportunities as they arise that would enhance shareholder value. Without cash, it becomes difficult to begin new projects such as developing new products, making acquisitions, etc.
FCF = EBIT (1-tax rate) + depreciation & amortisation