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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.
How We Calculate This
We calculate FCF as Operating Cash Flow minus Capital Expenditures from the most recent trailing twelve months (TTM) cash flow statement via Yahoo Finance. FCF Margin = FCF / TTM Revenue. FCF Yield = FCF per Share / Current Price. We also display 4-year FCF history to show trend direction.
Frequently asked questions
What is free cash flow?
Free cash flow (FCF) is the cash a company generates after paying for capital expenditures needed to maintain or expand its asset base. FCF = Operating Cash Flow − Capital Expenditures. It represents the cash available to pay dividends, reduce debt, or reinvest in growth.
Why is free cash flow more important than earnings?
Earnings can be manipulated through accounting choices; cash flow is harder to fake. Companies with high earnings but negative FCF may be running a cash-burning operation. Warren Buffett uses owner earnings — a concept close to FCF — as his primary measure of business value.
What is a good free cash flow margin?
FCF margin (FCF / Revenue) varies widely by industry. Software companies often achieve 25–40% FCF margins; retailers typically 3–8%; capital-intensive industrials 5–15%. Compare FCF margin against sector peers rather than absolute benchmarks.
What is the difference between FCF and EBITDA?
EBITDA excludes capital expenditure, so it can overstate cash generation for capital-intensive businesses. FCF accounts for capex and is a more conservative, cash-based profitability measure. A company with high EBITDA but high capex may have modest or negative FCF.
How do you use free cash flow for stock valuation?
Analysts use FCF in discounted cash flow (DCF) models — projecting FCF over 5–10 years and discounting back at WACC to estimate intrinsic value. A P/FCF ratio (price divided by FCF per share) is also used as a valuation multiple, similar to P/E.