About Price to Free Cash Flow

The Price to Free Cash Flow ratio or P/FCF is the price divided by its free cash flow per share. The free cash flow value in the denominator is the cash from operating activities plus change in property plant & equipment (PPE) divided by shares outstanding (Free Cash Flow = (Cash From Operating Activities + Change in PPE)/ Shares Outstanding). It's sometimes viewed as a better alternative to Price to Cash Flow (P/CF) because Price to Free Cash Flow factors in capital expenditures to better reflect the cash flow that's actually available to the company.