Free Cash Flow Margin

Free cash flow margin measures free cash flow as a percentage of revenue.

Free cash flow margin measures how much of each dollar of revenue becomes free cash flow after operating cash needs and capital expenditures.

Formula

Free cash flow margin = Free cash flow / Revenue

It is a useful companion to net profit margin and EBITDA margin because it focuses on cash conversion. Compare it with net profit margin by industry and EBITDA margin by industry.

Related calculator: Free Cash Flow Margin Calculator.