Free Cash Flow Margin

What is Free Cash Flow Margin?

Free Cash Flow Margin is the percentage of revenue that remains as free cash flow after a company pays for its operating expenses and capital expenditures.

Formula:
Free Cash Flow Margin = (Free Cash Flow / Total Revenue) * 100

What does Free Cash Flow Margin mean?

Free Cash Flow Margin measures how much of a company’s revenue is converted into free cash flow (FCF), which is the cash available after covering operating expenses and capital expenditures. It shows how efficiently a company generates cash from sales.