Free-cash-flow margin

What it measures¶

Free cash flow is operating cash flow — the cash that came in from running the business — minus capital expenditure, the money spent on equipment and buildings. The free-cash-flow margin divides it by revenue: how much of each unit of sales the company kept as spare cash.

Why it is on the page¶

It is the bottom of the margin funnel and the closest to cash in the owners' hands. When it sits far below the net margin, profit is being absorbed by investment or by working capital — stock and money owed by customers — as often happens in a growing company.

Thresholds, their source and the population they were fitted on¶

The page draws no zones: the margin depends on the industry and on where the company is in its investment cycle. Two uses elsewhere in the product apply a line to related figures: the Rule of 40 adds this margin to revenue growth for companies not yet making a profit, and the Why paragraph reads free cash flow against net income, between 0.8 and 1.2 times as in line.

• Fitted on: no population — a descriptive ratio.
• Evidence grade: not graded.

A worked example¶

Celestica, as the Fundamentals page showed it on 9 August 2026 (fiscal year 2025): free-cash-flow margin 3.70%, against a net margin of 6.72% — a little over half the profit arrived as spare cash.

What “No verdict” means here¶

The row carries no verdict of its own. It reads insufficient data when operating cash flow, capital expenditure or revenue is not stored.

What the verdict is and is not¶

The figure describes the share of one year's sales kept as spare cash. A single year of heavy investment can make it low or negative. It is not a forecast and not an instruction to trade the shares.