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.

East-West Bancorp EWBC Free cash flow margin

Discontinued — last reported Q1 '21

Free cash flow margin at other companies

Citizens Financial GroupCFG

33.7%+7.3pp

UMB FinancialUMBF

34.7%—

SouthStateSSB

24.1%—

First Citizens BancSharesFCNCA

23.5%+0.8pp

Huntington BancsharesHBAN

24.4%+0.6pp

Old National BancorpONB

26.6%-4.4pp

Other financials

Income statement

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Revenue$773.7M+11.8%

Net income$357.8M+23.3%

EPS (diluted)$2.57+23.6%

Balance sheet

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Cash & equivalents$4.4B+28.7%

Total debt$184.3M+49.8%

Total equity$9.0B+13.5%

Total assets$82.9B+8.8%

Cash flow

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Operating cash flow$428.6M+54.2%

CapEx$99.0M+3,852%

Free cash flow$329.6M+19.7%

Valuation

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Market cap$17.37B+18.2%

Enterprise value$13.12B+14.7%

P/E12.5×-0.1×

P/S5.8×+0.2×

Profitability

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Net margin46.2%+2.2pp

Returns & leverage

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Return on equity16.5%+0.8pp

Debt / equity0×0.0×

Where this comes from

Calculated from East-West Bancorp’s reported figures.

free cash flow/total revenue=58%

Based on trailing twelve months.

The official record: East-West Bancorp’s 10-Q, filed May 9, 2022, 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.