Price to free cash flow (P/FCF)
What you pay for one unit of cash left after the capital spending needed to keep operating.
This is the closest common ratio to the cash an owner could actually take out of the business.
How it is computed here
Market capitalisation / free cash flow
Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it. Filed under value. Neither a high nor a low reading is good on its own, so it is never coloured as one.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Free cash flow is lumpy: one heavy investment year can make a healthy company look dear.
- Maintenance and growth capital spending are reported as one line, so a company investing to expand is penalised as if it were merely standing still.
Questions
How is price to free cash flow calculated?
Market capitalisation / free cash flow. Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it.
What does price to free cash flow tell a value investor?
This is the closest common ratio to the cash an owner could actually take out of the business.
When does price to free cash flow mislead?
Free cash flow is lumpy: one heavy investment year can make a healthy company look dear. Maintenance and growth capital spending are reported as one line, so a company investing to expand is penalised as if it were merely standing still.