Free cash flow (FCF)
What it is: the actual CASH left after running and maintaining the business — the money that can pay dividends, buy back stock, or pile up. Earnings are an accounting opinion; cash is a fact.
FCF yield (chart) = FCF ÷ market cap — like an interest rate the business pays you:
• 5%+ (green) = cash machine at a fair price
• Near zero or negative = burning cash — fine for young growers, deadly for mature ones
The classic fraud detector: profits growing while FCF shrinks year after year = someone is getting creative with accounting. Enron looked profitable; its cash flow told the truth.