S&P 500 Aggregate Free Cash Flow Conversion Rate (TTM)

Live value temporarily unavailable.

Source: Company filings (aggregated)

Data updated daily

What it measures

The S&P 500 FCF conversion ratio measures aggregate free cash flow as a percentage of aggregate net income for index constituents on a trailing-twelve-month basis. Free cash flow is operating cash flow minus capital expenditures. A reading of 85% means S&P 500 companies collectively converted $85 of every $100 of reported net income into free cash flow.

Why it matters

FCF conversion is the most direct test of earnings quality: high and stable conversion confirms that reported profits are backed by real cash generation, while low or deteriorating conversion signals earnings inflated by accruals or rising capital requirements. A conversion ratio persistently above 100% reflects non-cash charges (depreciation, amortization, SBC) exceeding working capital consumption. Ratios below 50% are a serious warning sign that should trigger scrutiny of working capital trends and accrual patterns. At the index level, FCF conversion is a leading indicator of whether the current earnings cycle is cash-backed or accounting-driven.

How it is calculated

FCF Conversion (TTM) = Σ TTM Free Cash Flow ÷ Σ TTM Net Income × 100

LENSE computes the S&P 500 FCF conversion ratio as aggregate TTM free cash flow divided by aggregate TTM net income — not a simple average of per-company ratios. FCF per constituent is computed as operating cash flow minus capital expenditures from as-reported quarterly cash flow statements; TTM figures are constructed by summing the four most recently reported quarters. Constituents with negative TTM net income are excluded from the denominator. Index constituency is resolved point-in-time via the S&P 500 membership point-in-time index constituency.

Recent (monthly)

Recent data unavailable.

Data source: Company filings (aggregated). Computed and published by LENSE Analytics.