Free cash flow margin

Also called: free cash flow margin

The share of each sale that turns into free cash.

Formula

FCF margin = Free cash flow ÷ Revenue

Worked example

1. Free cash flow = $2.2bn − $700m = $1.5bn
2. Revenue = $10.0bn
3. $1.5bn ÷ $10.0bn

Result: 15.0%

How to read it

Use this as the starting FCF margin in the DCF calculator.

Worked example uses made-up figures for 'Example plc'

See it with real numbers: Any company page → (free account)