Price-to-Free-Cash-Flow P/FCF
How many dollars investors pay for each dollar of cash a company generates after capital spending.
What it is
Price-to-free-cash-flow compares a company's market value to its free cash flow, the cash left over after operating expenses and capital expenditures. Free cash flow is the money actually available to pay debt, dividends, or buy back stock. It is harder to manipulate than accounting earnings.
Why it matters
Many investors trust cash flow more than reported earnings because earnings include non-cash items and accounting choices. Pitfalls: free cash flow is lumpy for capital-intensive firms, can swing year to year, and is not meaningful when negative, which is common for young or heavily-investing companies.
How it's calculated
Divide total market capitalization by trailing-twelve-month free cash flow, where free cash flow equals operating cash flow minus capital expenditures.
How Quintarthai uses it
The cash-flow statement and derived cash metrics appear in the Financials and Ratios tabs of a stock's company page, where you can see operating cash flow and capital expenditures behind the figure.