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Free Cash Flow Calculator: See If a Company Generates Real Cash
Accounting earnings can be engineered. Free cash flow can't. Enter any US-listed ticker and we'll pull operating cash flow, capex, and shares outstanding — then show you FCF, FCF margin, FCF yield, and a 5-year trend. One click hands the number off to our DCF calculator.
Enter any US ticker to see instant free cash flow
We'll pull FCF, FCF margin, FCF per share, FCF yield, and a 5-year trend — all from live financial data. Then you can hand it off to our DCF calculator with one click.
Why free cash flow matters more than net income
Owner earnings vs accounting earnings
Warren Buffett coined the term "owner earnings" to describe what actually belongs to shareholders: the cash a business produces after reinvesting enough to maintain its competitive position. Net income is an accounting construct — free cash flow is the cash you could, in principle, withdraw from the business every year without damaging it. Buffett's framework is the honest version of what a DCF is trying to measure.
Two companies can report identical earnings and have wildly different FCF. The one with stronger FCF is almost always the better business — and the better investment.
Why FCF beats net income for valuation
Net income is distorted by depreciation schedules, stock-based compensation, working capital timing, goodwill impairments, and one-time charges. Companies have enormous discretion over when to recognize revenue, how fast to depreciate assets, and how to classify expenses. None of this affects the cash in the bank at year-end.
Free cash flow cuts through the accounting. If a company reports $1B of net income but only $200M of FCF, something is converting earnings into non-cash line items. That's a red flag. Read our earnings quality red flags guide to learn what to look for.
When FCF misleads
FCF isn't perfect. It can be distorted by capex cycles (a company building a new factory looks cash-poor for a year, then rebounds), working capital swings (a one-time receivables collection inflates FCF), and maintenance vs growth capex mixing (heavy growth capex makes a great business look like a cash burner).
Rule of thumb: look at 3–5 years of FCF, not a single year. The sparkline above shows you the trend — a company with lumpy FCF but a clearly rising trend is usually healthier than a flat-FCF business, even if the latest year looks worse.
From FCF to intrinsic value
Free cash flow is the starting input for every DCF model. You project future FCF, discount it back to present value, and compare to market cap. The result is intrinsic value — what the business is actually worth, independent of market sentiment.
When you're ready, click Run full DCF with this FCF → to hand the number off to our DCF calculator. You can also dig into the balance sheet to confirm the cash is real and the accounting hub for more on how earnings get engineered.
Frequently asked questions
What is free cash flow?
Free cash flow (FCF) is the cash a business generates from operations after paying for the capital expenditures needed to maintain and grow the business. It's the cash actually available to return to shareholders, pay down debt, or reinvest — independent of accounting choices that distort reported earnings.
How is free cash flow calculated?
The standard formula is: Free Cash Flow = Operating Cash Flow − Capital Expenditures. Both figures are on the cash flow statement in any 10-Q or 10-K. Use trailing twelve months (TTM) to capture the most current picture. This calculator auto-pulls both line items and shows the result in seconds.
What is a good FCF yield?
FCF yield = free cash flow ÷ market cap. Above 5% is strong — the business is generating real cash relative to its price. 2–5% is mediocre, acceptable only if FCF is growing meaningfully. Below 2% means you're paying a premium, typically justified only by exceptional growth prospects or pricing power. Compare to the 10-year Treasury yield (~4.5%) as a baseline — a stock yielding less than bonds needs to justify itself with growth.
FCF vs net income — which matters more for valuation?
FCF matters more for valuation. Net income is heavily influenced by accounting choices — depreciation schedules, stock-based compensation, working capital timing, one-time charges. Free cash flow is closer to Warren Buffett's 'owner earnings' — the actual cash you could extract from the business without harming it. Two companies with identical net income can have wildly different FCF, and the DCF-correct answer is always the one with more cash.
How do I use FCF in a DCF model?
Free cash flow is the starting point of every discounted cash flow model. You take the current year's FCF, project it forward at a realistic growth rate (usually tapering toward GDP growth), and discount those future cash flows back to present value using a required rate of return. The result is intrinsic value. Click 'Run full DCF with this FCF' to hand the number off to our DCF calculator and see the full valuation in under a minute.