Free Cash Flow to Sales %

What is the definition of FCF/ Sales %?

Free cash flow to sales is a valuation ratio that measures a company's surplus cash flow against sales revenues. The ratio indicates how much of a company's revenue is transformed into cash.


Stockopedia explains FCF/ Sales %...

FCF/Sales expressed as a percentage is often used to find 'cash cow' stocks. When screening the market it's good to look for FCF/Sales > 5% - that's often a sign of a high quality company. This ratio was covered in depth in Pat Dorsey's Morningstar books.

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