Valuation Terms
Free Cash Flow Yield
Free cash flow shown relative to market value or enterprise value.
Also called: FCF yield
What it means
Free cash flow yield measures how much free cash flow a company generates relative to its market capitalization or sometimes enterprise value. It is the inverse style of thinking behind a price-to-free-cash-flow ratio.
Why it matters
It helps users think about valuation in percentage terms instead of only multiples.