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.

W.R. Berkley WRB Free cash flow margin

Discontinued — last reported Q4 '19

Free cash flow margin at other companies

MarkelMKL

13.6%-0.8pp

Cincinnati FinancialCINF

26.6%+3.0pp

Arthur J. GallagherAJG

21%-0.1pp

Brown & BrownBRO

22.3%-3.7pp

Arch Capital GroupACGL

29.6%-6.3pp

Berkshire HathawayBRK.A

6.4%—

Other financials

Income statement

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Revenue$3.7B+4.0%

Net income$515.2M+23.4%

EPS (diluted)$1.31+26.0%

Balance sheet

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Cash & equivalents$2.3B+32.6%

Total debt$255.7M+14.7%

Total equity$9.7B+9.3%

Total assets$44.3B+7.2%

Cash flow

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Operating cash flow$667.9M-10.2%

Valuation

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Market cap$25.01B-8.0%

Enterprise value$22.98B-10.6%

P/E13.3×-2.4×

P/S1.7×-0.3×

Profitability

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Net margin12.6%+0.2pp

Returns & leverage

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Return on equity20.1%-0.6pp

Debt / equity0×0.0×

Where this comes from

Calculated from W.R. Berkley’s reported figures.

free cash flow/total revenue=13.7%

Based on trailing twelve months.

The official record: W.R. Berkley’s 10-Q, filed November 4, 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.