Free FCF Yield Calculator
Calculate free cash flow yield from FCF per share and price, with the price-to-FCF multiple and the spread over the 10-year Treasury yield.
Price-to-FCF multiple: 20.0x
That is 1.0 points above the risk-free Treasury yield, the premium you earn for taking equity risk.
What FCF yield tells you
Free cash flow yield is the cash a business generates as a percentage of its price. It answers the plainest possible question: for every dollar I put in, how much real cash does the business throw off each year? Because it is built on cash rather than accounting earnings, it resists the adjustments and recognition choices that can flatter a reported profit. A high and durable FCF yield is one of the most reliable signals of a business priced reasonably.
How to use this calculator
- Enter free cash flow per share and the current price. The calculator returns the yield and the inverse, the price-to-FCF multiple.
- Enter the 10-year Treasury yield to see the spread. That comparison is the heart of the read.
- Judge the yield against the company's own history and its sector, not as an absolute number.
Comparing to the risk-free rate
The single most useful comparison is to the 10-year Treasury yield. When a stock's FCF yield sits well above the risk-free rate, you are being paid a premium for taking equity risk. When it sits below, the market is pricing in growth, and you are paying up front for cash that has not arrived yet. Neither is wrong on its own, but the spread tells you what you are actually being asked to accept.
Assumptions and limits
Free cash flow has no single definition, so check what goes into your figure. Subtract all capital expenditure, not just maintenance, for a conservative number, and treat stock-based compensation as a real cost. A high-growth business may show a low or negative FCF yield while it reinvests heavily; that is not automatically a red flag, but it changes what the yield means. Read several years together rather than a single one.
Related calculators
- DCF calculator — turn a free cash flow figure into a full intrinsic value with a two-stage model.
- Owner earnings calculator — refine the cash figure by separating maintenance capex from growth capex.
Frequently asked questions
- What is free cash flow yield?
- Free cash flow yield is a company's free cash flow per share divided by its share price, expressed as a percentage. It tells you how much real cash the business generates for each dollar you invest. A 7 percent FCF yield means the business produces seven dollars of cash for every hundred dollars of share price.
- How do I calculate FCF yield?
- Divide free cash flow per share by the current share price. You can also compute it as total free cash flow divided by market capitalisation, which gives the same figure. The inverse, price divided by free cash flow per share, is the price-to-FCF multiple.
- What is a good FCF yield?
- It depends on growth and quality, but the comparison that anchors it is the risk-free rate. When a stock's FCF yield sits well above the 10-year Treasury yield, you are being paid a premium for taking equity risk. When it sits below, the market is pricing in growth, and you are paying up for it. Compare within a sector and against the company's own history.
- Why use FCF yield instead of the P/E ratio?
- The P/E ratio uses accounting earnings, which can diverge from cash through non-cash charges, working capital swings, or aggressive recognition. Free cash flow is harder to manage, so FCF yield is often a more reliable read on what a business actually produces for its owners. Checking both together is more informative than either alone.
This calculator is for education and research only. It is not investment advice and it does not recommend buying or selling any security. The output depends entirely on the assumptions you enter.