Equity Valuation
Price-to-Free-Cash-Flow Ratio
Definition
What is Price-to-Free-Cash-Flow Ratio?
Market capitalisationThe market value of a company's outstanding shares, calculated as share price multiplied by shares outstanding. divided by free cash flowCash remaining after operating cash flow and necessary capital expenditure, under the stated definition..
Example in practice
How This Looks in Practice
A ₦50 billion company generating ₦5 billion free cash flow trades at ten times FCF.
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Related Terms
Equity Valuation
Earnings Per Share
Net income attributable to ordinary shareholders divided by weighted average ordinary shares.
Equity ValuationDiluted Earnings Per Share
Earnings per share assuming potentially dilutive securities convert into ordinary shares.
Equity ValuationBasic Earnings Per Share
Earnings per share calculated using actual weighted average ordinary shares outstanding.
Cash Flow AnalysisOperating Cash Flow
Cash generated or used by a company's core operations.