<p>The Price to Free Cash Flow (P/FCF) ratio is a valuation metric used in fundamental analysis to determine the price an investor pays for each dollar of a company's free cash flow. It's an alternative to the Price to Earnings (P/E) ratio, focusing on cash generated by the business after accounting for capital expenditures.</p>

<h2>How It Works</h2>
<p>The P/FCF ratio is calculated as:</p>
<ul>
  <li>Price per share / Free cash flow per share</li>
</ul>
<p>Where:</p>
<ul>
  <li>Free cash flow (FCF) is calculated as: Cash flow from operations (CFO) - Capital expenditures (CapEx)</li>
</ul>
<p>For example, if a company's stock price is $100 and its free cash flow per share is $20, the P/FCF ratio would be 5.</p>

<h2>Why It Matters</h2>
<p>The P/FCF ratio matters because it helps investors understand how much they're paying for a company's cash flow, which is a key driver of stock prices. It's particularly useful in comparing companies with different levels of capital expenditure or depreciation. For instance, a tech company with high research and development expenses might have a lower P/FCF than a utility company, even if their P/E ratios are similar.</p>