FCF Yield
Free Cash Flow Yield
Valuation RatiosFree cash flow per share divided by the share price, or firm-level free cash flow divided by market cap. It shows the cash return the business generates on its current price.
Formula
FCF Yield = Free Cash Flow / Market Cap
Why it matters
Earnings are an opinion; free cash flow is closer to fact. A healthy FCF yield indicates the valuation is supported by actual cash generation, not just accounting profit.
Indian example
Related terms
Learn the concept
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