At U.S. Global Investors, one of our favorite financial metrics for screening gold and precious metal mining stocks is free cash flow (FCF) yield, which we believe provides clear insight into a company’s financial health and operational efficiency.
To define FCF yield, let’s first look at free cash flow. This metric represents the cash a company gets to keep after accounting for its operating expenses and capital expenditures. In other words, it’s the money available for distribution to investors. Unlike earnings or net income, free cash flow is harder to manipulate on financial statements, making it a more credible reflection of profitability.
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