IFB370: Free Cash Flow Metrics - Margin, Yield, and Conversion Explained
Description
In episode 370 of the Investing for Beginners Podcast, Dave and Andrew tackle listener questions about PE ratios, target date funds, debt-to-equity ratios, and free cash flow metrics. Learn how to evaluate companies, understand expense ratios in 401(k)s, and use DCF models to value businesses. A must-listen for beginner investors!
[00:01:21 ] Missing PE ratios? It’s often due to negative or missing earnings.
[00:03:12 ] Target date funds simplify rebalancing but limit investment flexibility.
[00:06:57 ] High expense ratios in 401(k)s vary by employer and fund options.
[00:11:46 ] Debt-to-equity ratios must be evaluated alongside interest coverage metrics.
[00:18:05 ] DCF models can include debt, depending on the valuation approach.
[00:26:00 ] Free cash flow margin measures efficiency in converting revenue to cash.
[00:27:15 ] Free cash flow yield helps identify undervalued stocks with strong returns.
[00:34:42 ] Free cash flow conversion shows how well earnings turn into cash flow.
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