FCF yield
Free cash flow yield on market cap: how much free cash the company generates per dollar invested in its shares.
FCF Yield = Free Cash Flow ÷ Market Cap
It flips the multiple into something comparable with an interest rate: how much free cash the company generates per euro you pay for its shares. A 6% FCF yield is the cash equivalent of a P/E of about 17.
Placed next to the 10-year bond, it tells you at a glance how much premium you're collecting for taking business risk. And since it starts from cash rather than profit, it isn't fooled by accounting adjustments — though it is fooled by a year of abnormally low investment, so look at the series rather than the latest figure.
Where to see it on ValuatePad
Year by year, for every company, in the tab Market.