FORMULA CARD
Cash flow and leverage formulas
Use cash and debt definitions consistently and explain unusual items
Core formulas
| Measure | Formula | What it tells you | Common error |
|---|---|---|---|
| Free cash flow | Cash flow from operations - Capital expenditure | Cash generated after maintaining or expanding assets | Subtracting Capex twice when it is already negative |
| FCF margin | Free cash flow / Revenue | Cash conversion relative to revenue | Comparing different fiscal periods |
| Net debt | Total debt - Cash and cash equivalents | Debt burden after available cash | Ignoring lease liabilities without explanation |
| Net debt / EBITDA | Net debt / EBITDA | Approximate leverage relative to earnings | Using negative or adjusted EBITDA without flagging it |
Interpretation rule
State the definition you used. If the company reports an alternative definition, show the difference rather than hiding it.