Dados B3 › Glossary

Glossary

FCF yield (free cash flow yield)

How much free cash the company generated in the year for each real of its market value.

What it is

How much free cash the company generated in the year for each real of its market value. Shown on the stocks pages.

How Dados B3 calculates it

(operating cash flow − capex) ÷ market value. Capex is the cash spent on fixed and intangible assets, read from the cash flow statement lines; without that line the figure is not published. It does not exist for banks and insurers.

Example

Illustrative example, with made-up numbers to keep the arithmetic easy: Operating cash flow R$ 300 million, capex R$ 100 million: free cash flow R$ 200 million. With a market value of R$ 2 billion, FCF yield = 200 ÷ 2,000 = 10%.

What to watch for when reading it

• Negative usually means heavy investment that year; understand why before concluding anything.
• A single year misleads: look at the series.
• Free cash flow is not a guaranteed dividend; the company may use the cash to repay debt.

See also

• P/OCF and P/FCF
• Dividend yield (DY)

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Educational content to understand what each number means. It is not a recommendation to buy or sell.