Free Cash Flow Yield Screen
Compare manually entered levered free cash flow ratios across companies using the same currency, scale, and reporting period.
Earlier editorial review
- Reviewed
- 2026-09-25
- Methodology
- 1.1
Sources
How it works
Enter each company’s ticker, levered free cash flow, market capitalization, enterprise value, and earnings. These are manual inputs, not fetched values. Keep the currency, scale, and reporting period consistent within each row.
The screen calculates equity FCF yield, levered FCF divided by enterprise value, the market cap to FCF multiple, earnings yield, and FCF conversion. It sorts rows by equity FCF yield from highest to lowest. Incomplete rows with any entered value must have all required fields and a unique ticker.
Use the results as ratios for comparison. The enterprise value ratio keeps the same levered FCF numerator, while the equity yield uses market capitalization. Neither ratio is a valuation estimate or a forecast of future cash flow.
Review the cash flow definition and reporting period used for each company. A common operating cash flow minus capital expenditures shortcut is not necessarily a complete FCFE measure because it omits net borrowing.
Step by step
- Enter financial statement values and market values for each company.
- Keep currency, scale, period, and cash flow definition consistent within a row.
- Compare the calculated ratios and the fixed illustrative yield band.
Worked example
Enter levered free cash flow of 120, market capitalization of 1,500, enterprise value of 1,800, and earnings of 100. Use the same currency, scale, and reporting period for all four values.
The results are 8% equity FCF yield, a 12.5 times market cap to FCF multiple, 6.67% earnings yield, 6.67% levered FCF divided by enterprise value, and 120% FCF conversion. The 8% yield is in the moderate band because the high band starts above 8%.
When to use this screen
Use this screen to compare entered cash flow and market values across companies when their reporting periods, units, and cash flow definitions are aligned.
For a capital provider yield, use free cash flow to the firm with enterprise value. For this screen’s equity yield, use levered free cash flow with market capitalization.
Common entry mistakes
Do not mix values reported in thousands or millions with values in full currency units. A scale mismatch changes every ratio and multiple.
Do not compare rows from different reporting periods or use a single seasonal quarter as though it were a full year. Align the period and definitions before comparing results.
Formula and units
Equity FCF yield = levered free cash flow ÷ market capitalization × 100
Levered FCF to enterprise value ratio = same levered free cash flow ÷ enterprise value × 100
Market cap to FCF multiple = market capitalization ÷ free cash flow, when free cash flow > 0
Earnings yield = earnings ÷ market capitalization × 100
FCF conversion = free cash flow ÷ earnings × 100, when earnings ≠ 0
Enter values in the same currency, scale, and reporting period within each row. Market capitalization and enterprise value must be positive. The multiple is unavailable for zero or negative FCF. Conversion is unavailable when earnings are zero. Negative earnings can produce negative ratios.
Assumptions and limitations
This screen compares manually entered values for one reporting period. Free cash flow definitions vary, and a common operating cash flow minus capital expenditures shortcut may omit net borrowing needed for a complete FCFE measure. The enterprise value ratio uses the same levered numerator and is not an unlevered yield. The fixed yield bands are illustrative sorting labels only. The screen does not fetch or normalize financial statements, convert currencies, forecast cash flow, or determine whether a company is fairly valued.
Key terms
- Levered free cash flow
- A cash flow measure available to equity holders after operating costs, interest, and capital investment, under the definition used for the input.
- Illustrative yield bands
- The screen’s fixed labels: high above 8%, moderate above 4% through 8%, and low at or below 4%. They are sorting bands, not valuation or quality judgments.
- Levered FCF to enterprise value ratio
- The same levered free cash flow input divided by enterprise value. It is not an unlevered yield because the numerator is not free cash flow to the firm.
Compare related methods
A discounted cash flow model estimates value from forecasts. This screen compares cash flow you enter with current equity and enterprise values. The two methods answer different questions.
Earnings and cash flow ratios use different accounting measures. Compare the reporting periods and definitions before comparing companies.
FAQ
What free cash flow does this screen use?
This screen uses the levered free cash flow value you enter. Operating cash flow minus capital expenditures is a common shortcut, but it is not a complete measure of cash available to equity holders when net borrowing also matters. Use a definition that matches the reporting period and the comparison you want to make.
Is FCF divided by enterprise value an unlevered yield?
No. The enterprise value ratio divides the same levered free cash flow input by enterprise value. Its numerator is not adjusted to free cash flow to the firm. Treat it as a simple comparison ratio, not an unlevered cash flow yield.
How should I read the yield bands?
The fixed bands are high above 8%, moderate above 4% through 8%, and low at or below 4%. The screen sorts rows by equity FCF yield from highest to lowest. These bands are illustrative sorting labels, not automatic signals that a company is cheap, expensive, or high quality.
What does the FCF multiple mean?
The FCF multiple is market capitalization divided by positive free cash flow. For example, 12.5 means market capitalization is 12.5 times the entered period’s FCF. It is a ratio, not a forecast of how many years it takes to recover an investment. The multiple is unavailable when FCF is zero or negative.
How can I make company comparisons consistent?
Use the same reporting period, currency, scale, and cash flow definition in each row. This tool does not fetch statements, normalize reporting differences, or convert currencies. Negative earnings or cash flow can make a ratio difficult to interpret; its sign depends on both inputs and is not a quality score.
Related tools
Use discounted cash flow valuation to examine forecasts, Altman Z Score for a separate distress screen, and earnings based measures for other accounting comparisons.