B

Glossary

Price-to-Free-Cash-Flow

Also: P/FCF

Important — standard screening

What it measures

How much you pay per dollar of real cash generated. More reliable than P/E — harder to manipulate.

Formula

Market Cap / Free Cash Flow

Benchmark

< 20 attractive · > 35 expensive

Related metrics

FCFFCF YieldP/E

Source

McKinsey, Valuation (7th ed.) ch. 12

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