i What this calculator does
Quick answer: Work out free cash flow, the yield on market capitalisation and on enterprise value, and how well it covers the dividend. With the default inputs (operating cash flow 5 100, capital expenditure 1 900), it returns free cash flow of R3 200m.
Free cash flow is what remains after a company has paid for the capital spending it needs to keep operating. It is the cash that can actually be returned to shareholders, which is why it is harder to manipulate than earnings.
The yield expresses it against the market price. A free cash flow yield of 8% means the business throws off eight cents of spare cash for every rand of market value, which can be compared directly against a bond yield or a fixed deposit rate.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
How to use the Free Cash Flow Yield Calculator
There is no blank form to complete. The inputs arrive with working values, and changing one at a time is what shows you the effect.
- 1. Operating Cash Flow (R million)
- 2. Capital Expenditure (R million)
- 3. Market Capitalisation (R million)
- 4. Net Debt (R million)
- 5. Dividends Paid (R million)
- 6. Net Profit (R million) For cash conversion
The result panel reports:
- Free Cash Flow Operating cash less capex
- FCF Yield on Market Cap Comparable to a bond yield
- FCF Yield on EV Including debt
Alongside the headline figures, the calculator reports operating cash flow, capital expenditure, dividend cover, cash conversion. Those are the numbers that usually explain why the headline result came out where it did.
Under the answer, every operation is shown, so a figure that looks wrong can be traced rather than guessed at.
Common results
What the calculator returns as the operating cash flow changes, with every other input at its default (capital expenditure 1 900, market capitalisation 218 890, net debt 4 500, dividends paid 1 400, net profit 2 450).
| Operating Cash Flow | Free Cash Flow | Fcf Yield On Market Cap | Fcf Yield On Ev |
|---|---|---|---|
| 1 500 R million | R-400m | -0.18% | -0.18% |
| 3 000 R million | R1 100m | 0.50% | 0.49% |
| 7 500 R million | R5 600m | 2.56% | 2.51% |
| 15 000 R million | R13 100m | 5.98% | 5.86% |
| 25 000 R million | R23 100m | 10.55% | 10.34% |
| 50 000 R million | R48 100m | 21.97% | 21.53% |
Figures used in this calculator
The South African constants this calculator relies on, with the page that holds the current value and the date it was last verified.
- Company tax: 27%. Source: Company Tax Rates Reference (verified 29 September 2026).
- Securities Transfer Tax: 0.25% on share purchases. Source: JSE Trading Cost Schedule (verified 27 September 2026).
- JSE trading hours: 09:00 to 17:00 SAST. Source: JSE Trading Hours and Holidays (verified 27 September 2026).
How the calculation works
Six inputs drive the result: Operating Cash Flow, Capital Expenditure, Market Capitalisation, Net Debt, Dividends Paid and Net Profit. Net Profit: For cash conversion. The free cash flow is R5 100m - R1 900m = R3 200m. The yield on market cap is R3 200m / R218 890m = 1.46%. The yield on ev is R3 200m / R223 390m = 1.43%. The dividend cover is R3 200m / R1 400m = 2.29x. The breakdown also lists operating cash flow, less capital expenditure, free cash flow and capex as share of operating cash.
A worked example in rand
Run it with the inputs it opens with, operating cash flow 5 100 R million, capital expenditure 1 900 R million, market capitalisation 218 890 R million, net debt 4 500 R million, dividends paid 1 400 R million and net profit 2 450 R million, and the free cash flow comes out at R3 200m, operating cash less capex. The other figures are fcf yield on market cap 1.46% and fcf yield on ev 1.43%. Now set the operating cash flow to 10 200: the free cash flow moves from R3 200m to R8 300m, the fcf yield on market cap moves from 1.46% to 3.79% and the fcf yield on ev moves from 1.43% to 3.72%.
How to read the result
For the default case the verdict is: "Free cash flow covers the dividend 2.29 times." Read it as a flag rather than advice: it tells you where the numbers sit relative to the usual rules of thumb. A single ratio is a starting question, not an answer: cheap can mean undervalued or deservedly cheap, and only the sector comparison and the earnings trend separate the two. Should I Take My Retirement Lump Sum as Cash or an Annuity? explains the thinking behind these figures.
The South African angle
Using the free cash flow yield calculator from South Africa adds a few local facts to the arithmetic. Earnings on the JSE are reported in rand but many large companies earn most of their revenue in dollars, so a rand valuation ratio moves with the exchange rate even when the business does not. JSE shares are quoted in cents, so a share showing 12,500 is R125, and the calculators here expect rand; dividing the quote by 100 before entering it is the most common slip. JSE companies report under IFRS and many present headline earnings per share, a South African measure that strips out certain items, alongside basic EPS; the two can differ materially. The free cash flow yield calculator draws on the same figures, which are kept on the JSE indices reference and updated as they change.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
See also: Bond Price, Yield and Duration Calculator
Frequently asked questions
Why use cash flow instead of earnings?
Earnings include non-cash items and the timing choices management makes. Cash flow is harder to shape. A company reporting rising profit while free cash flow falls is worth a closer look, and the gap is usually in working capital or capitalised costs.
What is a good free cash flow yield?
It has to be judged against the alternative. With the repo rate at 7.25% and fixed deposits paying meaningfully more than they did, a free cash flow yield below the cash rate needs a growth story behind it. Above it, the business is producing more spare cash than cash pays.
Should I use maintenance or total capex?
Total capex is what the accounts report and is the conservative choice. Maintenance capex, the spending needed only to stand still, gives a truer picture of distributable cash but is rarely disclosed and has to be estimated.
What does negative free cash flow mean?
That the company is spending more on assets than its operations produce. For a growing business in an investment phase that can be entirely rational. For a mature business it is a warning, because the spending is being funded from debt or shareholders.
Why measure the yield on enterprise value too?
Because free cash flow is available to all providers of capital, not only shareholders. Measuring against enterprise value keeps the numerator and denominator consistent and makes companies with different debt levels comparable.
What is a healthy cash conversion?
Free cash flow at eighty percent or more of net profit suggests the reported earnings are being backed by cash. Persistently below that, across several years, usually means either heavy capital intensity or accounting that flatters the profit line.
Want to embed this calculator on your site?
Embed this calculator
Free to use on your own site. Copy the code below and paste it where you want the calculator to appear.
<iframe src="https://www.tradeanswers.co.za/embed/free-cash-flow-yield-calculator.html"
width="100%" height="750" style="border:0;max-width:520px"
title="Risk Per Trade Calculator - TradeAnswers" loading="lazy"></iframe>
<p><a href="https://www.tradeanswers.co.za/free-cash-flow-yield-calculator.html">Free Cash Flow Yield Calculator</a> by <a href="https://www.tradeanswers.co.za/">TradeAnswers</a></p>