Enterprise Value / Free Cash Flow

What is the definition of EV / FCF?

Enterprise Value to Free Cash Flow compares the total valuation of the company with its ability to generate cashflow. It is the inverse of the Free Cash Flow Yield. The lower the ratio of enterprise value to the free cash flow figures, the faster a company can pay back the cost of its acquisition or generate cash to reinvest in its business.

FCF is calculated on a TTM basis.


Stockopedia explains EV / FCF...

Enterprise value is arguably a more accurate measure of the value of a firm, as it includes the debt, value of preferred shares and minority interest, but minus cash and cash equivalents.


Which Guru Screens is EV / FCF used in?
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  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
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