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.

Cigna CI Free cash flow margin

Discontinued — last reported Q4 '19

Free cash flow margin at other companies

CVS HealthCVS

1.8%—

UnitedHealth GroupUNH

4.4%-1.7pp

Elevance HealthELV

3.3%+1.3pp

BrightSpring Health Services, Inc.BTSG

3%—

CencoraCOR

1.1%+1.0pp

CenteneCNC

3.6%+2.7pp

Other financials

Income statement

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Revenue$68.5B+4.6%

Gross profit$14.4B-15.8%

Operating income$2.4B+19.6%

Net income$1.7B+25.0%

EPS (diluted)$6.26+29.1%

Balance sheet

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Cash & equivalents$7.0B-15.5%

Total debt$111.0M+32.1%

Total equity$42.2B+4.9%

Total assets$153.27B+1.7%

Cash flow

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Operating cash flow$1.1B-41.1%

Valuation

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Market cap$73.88B-21.1%

P/E11.9×-6.9×

P/S0.3×-0.1×

Profitability

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Gross margin20.6%-5.2pp

Operating margin3.4%-0.1pp

Net margin2.2%+0.3pp

Returns & leverage

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Return on equity15%+2.8pp

Debt / equity0×0.0×

Current ratio0.8×0.0×

Where this comes from

Calculated from Cigna’s reported figures.

free cash flow/total revenue=5.5%

Based on trailing twelve months.

The official record: Cigna’s 10-K, filed February 25, 2021, 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.