Definition

FCF Margin measures the percentage of revenue converted into free cash flow — the cash remaining after operating and capital expenses. A higher margin reflects greater financial flexibility for reinvestment, debt reduction, or dividends. The ideal level depends on the industry: software and technology companies often achieve margins of 20–30%, while manufacturing or retail firms typically operate at 5–10% due to higher capital requirements. A negative FCF Margin signals the company is burning more cash than it generates.