Free Cash Flow Conversion
The share of a company's profit that turns into actual free cash flow, showing how cash-efficient its earnings are.
What it is
Free cash flow conversion measures how much of a company's reported profit actually becomes free cash flow. It is usually shown as a percentage, comparing FCF against net income or against EBITDA. A high ratio means earnings reliably translate into spendable cash.
Why it matters
This ratio is a quality-of-earnings check: a business that converts most of its profit into cash is usually more durable than one whose earnings stay locked up in receivables, inventory, or heavy capital spending. Consistently low or volatile conversion can hint at aggressive revenue recognition or rising working-capital needs. Be aware the result depends on which denominator (net income or EBITDA) is used.
How it's calculated
Divide free cash flow by net income (or by EBITDA) over the same period and express it as a percentage. There is no single fixed convention, so check which base figure is being used.
How Quintarthai uses it
You can read the underlying free cash flow and earnings figures from the Financials tabs on a stock's company page to gauge how well profit converts to cash.