Free Cash Flow Yield Calculator
Calculate free cash flow yield relative to equity market capitalization.
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How this calculator works
FCF yield expresses entered free cash flow as a percentage of equity market capitalization.
Formula
Worked example
$80 million of free cash flow on a $1 billion market capitalization produces an 8% FCF yield.
How to interpret the result
FCF yield expresses entered free cash flow as a percentage of equity market capitalization.
Assumptions & limitations
Some analysts calculate cash-flow yields using enterprise value rather than market capitalization. Negative FCF produces a negative yield and should not be interpreted like a positive cash return.
Practical context
When this calculator is useful
Free cash flow yield is useful when comparing the cash generated for equity holders with the company’s market capitalization. It provides a cash-flow-oriented valuation perspective that can complement earnings-based measures.
How investors commonly use it
Investors may compare FCF yield with earnings yield, historical ranges and peer companies. They also examine whether free cash flow is recurring and whether unusually low capital expenditure or working-capital movements temporarily boosted the figure.
What FCF yield does not tell you
A high FCF yield is not automatically attractive. Free cash flow can be cyclical, temporarily inflated or required for debt reduction and reinvestment. Definitions of free cash flow can also differ among analysts and data providers.