Free Cash Margins Are Up and Stabilized

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While the uptick in free cash margin typically is a positive sign, the fact that it was driven by reductions in spending on capital assets and operations may reflect “lackluster results in the U.S. labor market and overall growth as companies face uncertainty.”

Companies’ free cash margin increased to 4.63 percent during the second quarter of 2013, up from 4.55 for the twelve months ending in June 2013, according to the latest analysis from the folks at the Georgia Tech Financial Analysis Lab. That compares to a low of 3.96 in December 2008, when the economy was in turmoil. Free cash flow is the cash available for shareholders after all prior claims have been satisfied. In early 2010, free cash margin topped 7 percent. Operating profit ...

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What's Basis Points?

Karen Kroll supplies the Business Finance community with reporting and commentary examining cash management and treasury-related topics.

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