---
title: "Definition of EV/FCF"
url: https://signalscreener.fr/definition/ev-fcf/
markdown_url: https://signalscreener.fr/definition/ev-fcf.md
description: "Enterprise value divided by free cash flow, showing how expensive a company is relative to the cash it generates."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "EV/FCF"
  - "EV to Free Cash Flow"
translations:
  de: https://signalscreener.fr/de/definition/ev-fcf.md
  es: https://signalscreener.fr/es/definition/ev-fcf.md
  fr: https://signalscreener.fr/fr/definition/ev-fcf.md
---

# EV to Free Cash Flow

## What is EV/FCF?

Enterprise value divided by free cash flow, showing how expensive a company is relative to the cash it generates.

## Think of it like this

Like paying 15 years of rental income upfront to buy a rental property - lower is generally better value.

## Formula

```
EV/FCF = Enterprise Value ÷ Free Cash Flow
```

- **Enterprise Value**: Market cap + debt - cash
- **Free Cash Flow**: Operating cash flow minus capex

## Why it matters

- More accurate than P/E for cash generation
- Accounts for debt levels
- FCF is harder to manipulate than earnings
- Useful for mature cash-generating businesses

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| < 10 | Cheap | Strong cash generation value |
| 10-20 | Fair | Reasonable valuation |
| 20-35 | Expensive | Paying premium |
| > 35 | Very Expensive | High growth expectations built in |

## Real-world example

A company with $10B EV and $1B FCF has EV/FCF of 10 - you're paying 10 years of cash flow.

---

This is educational content, not financial advice.

Source: [Definition of EV/FCF](https://signalscreener.fr/definition/ev-fcf/) on Signal Screener. Free to quote and cite with attribution and a link to that URL, which is the canonical one.

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