Measure the real cash a company generates for its price. Enter operating cash flow, capital expenditure and market cap to get free cash flow and the free cash flow yield.
Answer first: free cash flow yield tells you how much genuine, spendable cash a company produces each year for every dollar of its market value. This free cash flow yield calculator subtracts capital spending from operating cash flow to get free cash flow, then divides by market capitalisation — giving a cash-based cousin of the earnings yield that is much harder to fake.
Free cash flow = Operating cash flow − Capital expenditure
FCF yield = Free cash flow ÷ Market cap × 100
Example: $500M of operating cash flow minus $150M of capex leaves $350M of free cash flow. On a $5,000M market cap that is a yield of 350 ÷ 5,000 = 7% — the cash return you would earn if all of it were paid out.
Free cash flow is the money left after a company has paid its operating bills and reinvested to maintain and grow its asset base. It is the cash that can actually be handed to shareholders as dividends, spent on buybacks, used to pay down debt, or stockpiled — the true reward of ownership. Because it starts from the cash flow statement rather than accrual-based net income, it is far more resistant to accounting games than reported earnings.
Net income is an opinion; cash is a fact. Reported profit can be inflated by aggressive revenue recognition, generous depreciation assumptions or one-off paper gains, but a company either generated cash or it did not. A business that reports rising earnings while free cash flow stagnates or turns negative is waving a red flag — the profits may not be real, or every dollar is being consumed by capital spending. Comparing the two over several years is one of the most powerful quick checks in fundamental analysis.
A higher free cash flow yield means you are paying less for each dollar of cash the business throws off — broadly, cheaper. A mature, steady company yielding 6%–8% is generating solid cash relative to its price; a fast grower might yield only 1%–2% because investors are paying up for future cash, not today's. A negative yield means the company is burning cash, which can be fine for a young business investing heavily or dangerous for a mature one that should be self-funding. Always ask which situation you are in.
The single biggest judgement call is capital expenditure. "Maintenance" capex just keeps the existing business running, while "growth" capex builds new capacity that should pay off later. This calculator uses total capex, the conservative approach, which can understate the free cash flow of companies investing heavily to expand. For a fuller picture, look at the trend: is capex temporarily elevated for a big project, or is this the permanent cost of staying in business? Pair this yield with ROIC to judge whether that spending actually earns a good return.
Reality check: a single year's free cash flow can swing on the timing of capex and working-capital changes, so use multi-year averages. This calculator is educational, not investment advice. See the U.S. SEC at investor.gov for cash-flow-statement basics.
Compare with the earnings yield calculator, judge reinvestment quality with the ROIC calculator, value cash flows with the DCF calculator, and check the price with the EV/EBITDA calculator.
Last updated July 4, 2026 · Written by Mustafa Bilgic. Educational only — not financial advice.
It is free cash flow divided by market cap, expressed as a percentage. It shows how much real, distributable cash a company generates each year for every dollar of its market value — a cash-based valuation measure.
Subtract capital expenditure from operating cash flow. Operating cash flow comes from the cash flow statement; capex is the cash spent on property, plant and equipment. What remains is free to pay dividends, buy back shares or reduce debt.
Net income is calculated on an accrual basis and can be shaped by accounting choices. Free cash flow starts from actual cash, so it is much harder to manipulate. A gap between rising earnings and flat free cash flow is a warning sign.
It depends on growth. Mature companies yielding 6%–8% generate strong cash for their price; high-growth firms may yield only 1%–2% because investors pay for future cash. A negative yield means the company is burning cash.