Free cash flow (FCF) of a company is that amount which is available to equity and debt holders. This ratio specifies the FCF as a percentage of the total sales of the company.
Free cash flow to sales is calculated as follows
Free Cash Flow to Sales = Free cash flow/Sales
The total sales of a company in the given period are used here to calculate the ratio.
It is difficult to manipulate the FCF of a company. This is usually used to understand how much of the total revenue of the company is effectively being converted into cash.
Search & Explore : Management Dictionary
Browse definitions and meaning of more concepts and terms similar to Free Cash Flow To Sales. The Management Dictionary covers definitions and overview of over 7000 business concepts from 6 categories.
Related Business Content