Calculates the free cash flow yield ratio, which measures the free cash flow relative to the market capitalization of the company.

The free cash flow yield ratio is a measure of how efficiently a company generates free cash flow relative to its market value. It provides insights into whether the company’s valuation is reasonable compared to the amount of cash it generates.

The formula is as follows:

\[\text{Free Cash Flow Yield Ratio} = \text{Free Cash Flow} / \text{Market Capitalization}\]

Also known as: FCF yield.

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Calculate the Free Cash Flow Yield in Python

The Free Cash Flow Yield is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_free_cash_flow_yield as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

free_cash_flow_yield_ratios = toolkit.ratios.get_free_cash_flow_yield()

Which returns:

  2021 2022 2023 2024 2025
AAPL 0.031 0.0525 0.0327 0.0282 0.0242
TSLA 0.0029 0.0176 0.005 0.0025 0.0039

Parameters

get_free_cash_flow_yield accepts the following parameters:

  • show_daily (bool, optional): Whether to use daily data for the calculation. Defaults to False.
  • diluted (bool, optional): Whether to use diluted shares for market capitalization. Defaults to True.
  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
  • trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.
Debt to Assets Ratio Debt to Equity Ratio Interest Coverage Ratio Equity Multiplier Debt Service Coverage Ratio Net Debt to EBITDA Ratio Cash Flow Coverage Ratio CAPEX Coverage Ratio CAPEX Dividend Coverage Ratio Debt to Capital Ratio Preferred Dividend Coverage Ratio Interest Paid to Interest Expense Ratio

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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