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.

Roper Technologies, Inc. ROP Free cash flow margin

Discontinued — last reported Q3 '19

Free cash flow margin at other companies

Tyler TechnologiesTYL

28.9%+1.8pp

Rockwell AutomationROK

15.2%+1.8pp

FortiveFTV

22.8%-12.2pp

CognizantCTSH

11.5%+0.9pp

TD SYNNEXSNX

3.1%—

Applied Industrial TechnologiesAIT

9.1%-0.7pp

Other financials

Income statement

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Revenue$2.1B+11.3%

Gross profit$1.5B+12.4%

Operating income$569.6M+8.3%

Net income$508.9M+53.7%

EPS (diluted)$4.87+59.2%

Balance sheet

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Cash & equivalents$382.9M+2.7%

Total debt$10.5B+40.3%

Total equity$18.8B-2.1%

Total assets$34.6B+10.0%

Cash flow

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Operating cash flow$592.1M+12.0%

Valuation

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Market cap$33.33B-42.5%

Enterprise value$43.41B-33.9%

P/E19.4×-19.2×

P/S4.1×-3.9×

Profitability

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Gross margin69.4%+0.5pp

Operating margin28.1%-0.1pp

Net margin21.1%+0.4pp

Returns & leverage

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Return on equity9%+0.9pp

Debt / equity0.6×+0.2×

Current ratio0.5×+0.1×

Where this comes from

Calculated from Roper Technologies, Inc.’s reported figures.

free cash flow/total revenue=26.2%

Based on trailing twelve months.

The official record: Roper Technologies, Inc.’s 10-Q, filed November 4, 2020, 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.