---
title: "Definition of FCF Growth"
url: https://signalscreener.fr/definition/fcf-growth/
markdown_url: https://signalscreener.fr/definition/fcf-growth.md
description: "FCF Growth measures how much a company's free cash flow increased year-over-year."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "FCF Growth"
  - "Free Cash Flow Growth"
translations:
  es: https://signalscreener.fr/es/definition/fcf-growth.md
  fr: https://signalscreener.fr/fr/definition/fcf-growth.md
---

# Free Cash Flow Growth

## What is FCF Growth?

FCF Growth measures how much a company's free cash flow increased year-over-year. Strong FCF growth indicates the business is generating more real cash, not just accounting profits.

## Think of it like this

Your lemonade stand made $100 cash last summer after buying supplies. This year you made $150 cash. That's 50% FCF growth - you're getting better at turning sales into real money!

## Formula

```
FCF Growth = (Current Year FCF - Prior Year FCF) / Prior Year FCF × 100%
```

- **Current Year FCF**: This year's free cash flow
- **Prior Year FCF**: Last year's free cash flow

## Why it matters

- Shows if company generating more real cash
- More reliable than earnings growth
- Indicates business momentum and competitive strength
- Consistent growth attracts investors

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| < 0% | Declining | Cash generation weakening |
| 0-15% | Moderate Growth | Steady, sustainable pace |
| 15-30% | Strong Growth | Impressive expansion |
| > 30% | Exceptional | Rapid expansion, verify sustainability |

## Real-world example

Microsoft FCF growth: 15-20% annually - consistent and sustainable. Netflix during growth phase: 50%+ - rapid expansion. Mature retailers: 0-5% - slow growth markets. Tesla turnaround: -100% to positive - business transformation.

---

This is educational content, not financial advice.

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