FCF Yield Formula Variants: Same Stock, Different Numbers

The Baseline Number: Levered FCF Yield

When most sources say "FCF yield" without qualification, they mean the levered version — free cash flow available to equity holders, divided by what equity holders are paying for it.

Levered FCF Yield = (Free Cash Flow ÷ Market Capitalization) × 100%

Where:
Free Cash Flow = Operating Cash Flow − Capital Expenditures

Apple's fiscal 2024 numbers: operating cash flow of $118.3 billion, capital expenditures of $9.4 billion, giving free cash flow of $108.9 billion. With roughly 15.5 billion diluted shares and a stock price around $222 at fiscal year-end, market capitalization was approximately $3.44 trillion.

Levered FCF Yield = $108.9B ÷ $3,441B × 100% = 3.2%

Cross-check (per-share method):
FCF Per Share = $108.9B ÷ 15.5B shares = $7.02
FCF Yield = $7.02 ÷ $222 × 100% = 3.2% ✓

Total-company and per-share methods are algebraically identical — they're not two different numbers, just two paths to the same one. If a screener shows you a different figure than 3.2% for Apple, the difference isn't coming from which of these two methods it used. It's coming from somewhere else.

The Enterprise-Value Number: Unlevered FCF Yield

Here's where sources actually start to diverge. The levered formula above answers "what does the equity holder get?" A different, equally valid question is "what does the whole business generate, regardless of how it's financed?" That's unlevered FCF yield, and for a company with meaningful debt, it can produce a materially different number than the levered version.

Unlevered FCF Yield (FCF/EV) = (Unlevered FCF ÷ Enterprise Value) × 100%

Where:
Enterprise Value = Market Cap + Total Debt − Cash
Unlevered FCF = EBIT × (1 − Tax Rate) + D&A − ΔWorking Capital − CapEx

Apple is actually a poor case for illustrating the gap, because it carries net cash rather than net debt — its enterprise value sits close to its market cap, so levered and unlevered FCF yield converge tightly. The gap becomes real for companies financed with meaningful long-term debt: a utility, a telecom, or a leveraged industrial. A screener that reports FCF/EV for one of those names will show a noticeably different number than a screener reporting equity-level FCF yield — and neither is wrong. They're measuring different things.

If two sources disagree sharply on a heavily-indebted company's "FCF yield" but roughly agree on a net-cash company like Apple, that pattern itself is a clue: one of them is likely reporting the enterprise-value version.

Side by Side: Which Formula Is Which

For a full walkthrough of the unlevered formula's mechanics — including how to build unlevered FCF from EBIT — see Unlevered FCF Yield: Formula, Benchmarks & When to Use It.

Why Your Number Might Not Match a Source

Beyond the levered/unlevered split, three other things silently change the reported figure:

Net income substituted for operating cash flow. Some free "FCF" figures on aggregator sites start from net income and add back D&A, skipping working capital movements entirely. That approximation can be off by a meaningful margin for companies with large swings in receivables, inventory, or deferred taxes — it isn't the same number as OCF minus CapEx, even though both get called "FCF."

A non-standard CapEx definition. A handful of data providers exclude "growth CapEx" from the deduction, reporting a higher FCF (and therefore a higher yield) than the standard OCF-minus-total-CapEx calculation would produce. Before trusting a third-party FCF figure, check whether it nets out all CapEx or only a subset. The SEC filing is the definitive source either way.

Which fiscal year's CapEx. A company mid-way through building a new facility will show a depressed FCF yield that year on any variant of the formula, simply because that year's CapEx is unusually high. Averaging CapEx over two to three years — especially for asset-heavy industrials, energy companies, or semiconductor manufacturers — produces a more comparable number across sources than any single year in isolation. This isn't a difference in formula, just in which year's inputs went in.

Which Variant Should You Use?

For the majority of investor use cases — screening a list of stocks, evaluating a single company, comparing within a sector — the standard levered formula is sufficient, and it's what you'll get from the FCF Yield Calculator. Reach for the enterprise-value variant specifically when you're comparing companies with meaningfully different debt loads, or evaluating an acquisition target where the buyer would assume (or repay) existing debt. Don't bother distinguishing per-share from total-company — they're the same number by construction, so use whichever inputs are already in front of you.

For sector-by-sector benchmarks on what counts as a healthy yield, see What Is a Good Free Cash Flow Yield? For the full conceptual framework — how FCF yield compares to earnings yield, and how value investors apply it — the FCF Yield Guide covers all of it.

Disclaimer: This analysis is for educational purposes only and does not constitute investment advice, financial advice, trading advice, or any other type of advice. You should not make any investment decision based solely on this analysis. Always conduct your own due diligence and consult with a licensed financial advisor before making any investment decisions. Past performance does not guarantee future results. All investments carry risk, including the potential loss of principal.