Cash Flow & Capital Allocation

EV / Free Cash Flow

Compares the market price with free cash after required reinvestment or with an earnings, sales, cash-flow or book-value base. It does not say whether a company is good; it translates growth expectations, risk and profitability into a comparable number.

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EV / Free Cash Flow

evToFreeCashFlow · Cash Flow & Capital Allocation

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Definition: Compares the market price with free cash after required reinvestment or with an earnings, sales, cash-flow or book-value base. It does not say whether a company is good; it translates growth expectations, risk and profitability into a comparable number.
Calculation: Enterprise value / free cash flow.
Uses: Useful for comparing similar businesses and spotting gaps between price, quality and growth. Weak for cyclicals away from mid-cycle, banks with operating multiples, early biotech and companies without normalized profits. Cross-check DCF, own history, peers, FCF yield, ROIC and debt.