---
title: "Definition of FCF Margin 5Y"
url: https://signalscreener.fr/definition/fcf-margin-5y/
markdown_url: https://signalscreener.fr/definition/fcf-margin-5y.md
description: "The average free cash flow margin over the past 5 years, smoothing out year-to-year variations."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "FCF Margin 5Y"
  - "FCF Margin (5Y Average)"
translations:
  de: https://signalscreener.fr/de/definition/fcf-margin-5y.md
---

# FCF Margin (5Y Average)

## What is FCF Margin 5Y?

The average free cash flow margin over the past 5 years, smoothing out year-to-year variations.

## Think of it like this

Like looking at a restaurant's average profit margin over 5 years instead of just last year - shows consistent cash generation ability.

## Formula

```
5Y FCF Margin = Average of (FCF ÷ Revenue) over 5 years
```

- **FCF**: Free Cash Flow each year
- **Revenue**: Total sales each year
- **Average**: Mean of 5 annual calculations

## Why it matters

- Shows sustainable cash conversion
- Smooths out capex cycles
- Better than single year for comparison
- Indicates business quality over time

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| > 15% | Excellent | Consistently strong cash generation |
| 10-15% | Good | Solid cash conversion |
| 5-10% | Moderate | Average performance |
| < 5% | Low | Capital intensive or struggling |

## Real-world example

Microsoft maintains 25%+ FCF margins consistently, showing exceptional business quality.

---

This is educational content, not financial advice.

Source: [Definition of FCF Margin 5Y](https://signalscreener.fr/definition/fcf-margin-5y/) 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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