FCF yield — Free cash flow yield
Formula: FCF yield = Free cash flow / Market capitalization
where Free cash flow (FCF) = Cash from operations (CFO) − Capex
- CFO = CVM account 6.01 of the DFC (indirect method) — the cash the operation actually generated in the year.
- Capex = cash outflows on property, plant and equipment and intangibles
in the DFC (6.02 accounts whose label mentions property, plant and
equipment/intangibles and that are cash outflows, negative value). The exact
code varies between companies (6.02.01 at Petrobras, 6.02.02+6.02.03 at WEG,
6.02.05 at Vale), so capex is extracted by text search and the origin (the
sub-accounts added up) is recorded and auditable. With no capex line
identified, the FCF yield is not published (flag
sem_capex) — never estimated. - Market capitalization = point-in-time price × shares outstanding, the same as for P/E: price of the 1st trading session after the actual publication of the financial statements, no look-ahead.
The FCF yield says how much free cash the company generates for each real of market capitalization — it is the "potential dividend yield": what is left after maintaining and expanding fixed assets, available for dividends, buybacks or paying down debt. High and consistent is a business that pays for itself; negative is usually a company in heavy investment (not necessarily bad — but it demands understanding why).
Only for the COMMON chart of accounts: banks and intermediation insurers have no capex in the industrial sense, so the FCF yield is not published for them.
Source, treatment and limitations: see fontes_e_padronizacao.md and
multiplos.md.