Free cash flow (FCF): what it is
Free cash flow is the money a company has left after operating costs and investment in equipment. It pays for dividends, buybacks and debt repayment. Earnings can be shaped by accounting; free cash flow is real money.
Formula
Levered FCF — the same after interest on debt
FCF margin = FCF ÷ revenue × 100%
How to read it
- Profit without cash flow is a warning sign. The money is stuck in inventory and receivables or goes into construction.
- A dip due to investment can be temporary. While a company builds, cash flow falls even as the business grows. What the money goes to matters.
Live exampletrailing 12 months · data as of Nov 5, 2026
If the free cash flow margin is far below the operating margin, the company invests heavily in equipment and construction.
Rows in the terminal
Levered FCF Margin (TTM) — free cash flow margin
Free cash flow after interest on debt, divided by sales. The most demanding of the margins: it counts cash rather than earnings and subtracts capital spending. Consistently positive — the company funds itself.
Levered FCF Growth (YoY) — free cash flow growth
Free cash flow after interest on debt, year over year. This is the money actually left for shareholders after all expenses and investments — it pays dividends and buys back stock.
Frequently asked questions
Which is better: earnings or free cash flow?
Look at both. Steadily growing free cash flow confirms that the earnings are real.
Related terms
All 109 metrics for every stock, compared with its sector — in the terminal
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