---
title: "Definition of P/FCF"
url: https://signalscreener.fr/definition/price-to-fcf/
markdown_url: https://signalscreener.fr/definition/price-to-fcf.md
description: "P/FCF measures how much you're paying for a company's actual cash generation."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "P/FCF"
  - "Price-to-Free Cash Flow"
translations:
  es: https://signalscreener.fr/es/definition/price-to-fcf.md
  fr: https://signalscreener.fr/fr/definition/price-to-fcf.md
---

# Price-to-Free Cash Flow

## What is P/FCF?

P/FCF measures how much you're paying for a company's actual cash generation. It's similar to P/E ratio but uses free cash flow instead of earnings, which is harder to manipulate.

## Think of it like this

Imagine buying a vending machine that generates $100 real cash per year after all expenses. If you pay $1,500, that's a P/FCF of 15. You're paying 15 years of cash flow. Lower P/FCF means better value!

## Formula

```
P/FCF = Market Cap / Free Cash Flow
```

- **Market Cap**: Total company value (stock price × shares)
- **Free Cash Flow**: Cash after all expenses and investments (Operating Cash Flow - CapEx)

## Why it matters

- Shows if you're paying fair price for actual cash generation
- More reliable than P/E - harder to manipulate cash
- Warren Buffett focuses on free cash flow
- Important for mature, cash-generating companies

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| < 10 | Undervalued | Strong cash generation relative to price |
| 10-20 | Fair Value | Reasonable valuation |
| 20-30 | Premium | Paying for growth or quality |
| > 30 | Expensive | High expectations or overvalued |

## Real-world example

Apple P/FCF: ~15 - fair value for tech giant. Amazon P/FCF: 25+ - investors paying for growth. Utilities P/FCF: 8-12 - mature, steady businesses. High-growth startups: often negative FCF.

---

This is educational content, not financial advice.

Source: [Definition of P/FCF](https://signalscreener.fr/definition/price-to-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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