In conclusion, the price/free cash flow ratio is a valuable metric for investors to consider when evaluating a company’s ability to reward shareholders. Companies like Tesla, with high P/FCF ratios, may be seen as expensive and focused on growth rather than returning cash to shareholders. On the other hand, companies like Celanese Corporation, with lower P/FCF ratios and a focus on shareholder-friendly actions like dividends and share buybacks, may be viewed as a more attractive investment option. Understanding free cash flow and how it is calculated can give investors insight into a company’s financial health and future prospects. Ultimately, the P/FCF ratio is just one of many tools that investors can use to make informed decisions about their investments.
