Free Cash Flows / Operating Cash Flows Ratio

Free Cash Flows/Operating Cash Flows Ratio shows the ability of the enterprise to develop and measures its financial strength. The indicator is used by investors to assess the prospects of the project.

Alternative names of Free Cash Flows/Operating Cash Flows Ratio:

  • FCF/CFO
  • Free Cash Flows / Operating Cash Flows Ratio.

What Does Free Cash Flows/Operating Cash Flows Ratio Show?

The ratio allows to assess the financial stability of the company as well as its competitiveness. The investors calculate it to understand whether the company has prospects of increasing its cash flows.

Formula of Free Cash Flows/Operating Cash Flows Ratio

FCF / OCF = Free Cash Flow / Operating Cash Flow * 100%

Normative Value of Free Cash Flows/Operating Cash Flows Ratio

The higher the value of the indicator, the greater the financial sustainability of the company as well as its competitiveness and financial strength.