What does free cash flow margin mean?

How much real, spendable cash each sales dollar generates after reinvestment.

How do you interpret free cash flow margin?

A high and rising FCF margin is the hallmark of a cash-generative business. Persistent gaps between net margin and FCF margin warrant a look at working capital or capital intensity.

How does free cash flow margin compare across companies?

Strong cross-company quality signal; capital-light compounders post structurally higher FCF margins than asset-heavy peers.

Ares Management Corporation ARES Free cash flow margin

Discontinued — last reported Q4 '19

Free cash flow margin at other companies

BlackstoneBX

29.9%+2.1pp

The Carlyle GroupCG

-105.3%—

Brookfield Asset ManagementBAM

45.4%+19.6pp

Ameriprise FinancialAMP

36.7%-1.6pp

New York Mortgage TrustADAM

20.9%—

Citizens Financial GroupCFG

33.7%+7.3pp

Other financials

Income statement

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Revenue$1.4B+28.3%

Net income$142.6M+202%

Balance sheet

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Cash & equivalents$568.8M-8.0%

Total debt$730.1M+6.4%

Total equity$4.0B-9.6%

Total assets$28.4B+4.5%

Cash flow

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Operating cash flow$406.5M-79.6%

Valuation

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Market cap$29.17B-19.6%

Enterprise value$29.33B-19.2%

P/E46.8×-36.0×

P/S4.9×-3.6×

Profitability

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Net margin10.5%+0.3pp

Returns & leverage

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Return on equity14.7%+0.6pp

Debt / equity0.2×0.0×

Where this comes from

Calculated from Ares Management Corporation’s reported figures.

free cash flow/total revenue=-161.4%

Based on trailing twelve months.

The official record: Ares Management Corporation’s 10-K, filed February 24, 2023, on SEC EDGAR. View the filing →

Questions, answered.

What does free cash flow margin mean?: How much real, spendable cash each sales dollar generates after reinvestment.
How do you interpret free cash flow margin?: A high and rising FCF margin is the hallmark of a cash-generative business. Persistent gaps between net margin and FCF margin warrant a look at working capital or capital intensity.
How does free cash flow margin compare across companies?: Strong cross-company quality signal; capital-light compounders post structurally higher FCF margins than asset-heavy peers.