SIFCO Industries (SIFCO Industries) Free Cash Flow

: $-3.82 Mil (TTM As of Sep. 2023)

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SIFCO Industries's total free cash flow for the months ended in Sep. 2023 was $0.36 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Sep. 2023 was $-3.82 Mil.

SIFCO Industries's Free Cash Flow per Share for the months ended in Sep. 2023 was $0.06. Its free cash flow per share for the trailing twelve months (TTM) ended in Sep. 2023 was $-0.64.

During the past 3 years, the average Free Cash Flow per Share Growth Rate was 24.20% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was -3.70% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, SIFCO Industries's highest 3-Year average Free Cash Flow per Share Growth Rate was 83.00% per year. The lowest was -67.20% per year. And the median was 9.30% per year.

SIFCO Industries Free Cash Flow Historical Data

The historical data trend for SIFCO Industries's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

SIFCO Industries Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

Free Cash Flow

-3.72

-8.58

-1.09

-2.90

-3.82

SIFCO Industries Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
Free Cash Flow																-1.10	-0.26	-1.55	-2.37	0.36

SIFCO Industries Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

SIFCO Industries's Free Cash Flow for the fiscal year that ended in Sep. 2023 is calculated as

Free Cash Flow (A: Sep. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	-1.363	+	-2.454
	=	-3.82

SIFCO Industries's Free Cash Flow for the quarter that ended in Sep. 2023 is calculated as

Free Cash Flow (Q: Sep. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	0.907	+	-0.549
	=	0.36

Free Cash Flow for the trailing twelve months (TTM) ended in Sep. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $-3.82 Mil.

SIFCO Industries (AMEX:SIF) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Sep23, SIFCO Industries's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Sep23)	=	Normalized Free Cash Flow	/	Price	+	5-Year EBITDA Growth Rate
	=	0.44895238	/	3.67	+	-0.3016
	=	-17.93 %

Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.

SIFCO Industries Free Cash Flow Related Terms

Thank you for viewing the detailed overview of SIFCO Industries's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.

SIFCO Industries (SIFCO Industries) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Aerospace & Defense » SIFCO Industries Inc (AMEX:SIF) » Definitions » Free Cash Flow

Comparable Companies

Traded in Other Exchanges

N/A

Address

970 East 64th Street, Cleveland, OH, USA, 44103

Website

https://www.sifco.com

SIFCO Industries Inc is engaged in the production of forgings and machined components for the Aerospace and Energy, Defense and Commercial Space markets. Its processes and services include forging, heat-treating and machining. It serves original equipment manufacturers (OEM) as well as aftermarket customers. Its products are made of steel, stainless steel, titanium and aluminium and include OEM and aftermarket components for aircraft and industrial gas turbine engines, steam turbine blades, structural airframe components, aircraft landing gear components, aircraft wheels and brakes, critical rotating components for helicopters and industrial products. Substantial revenue is derived from North America as well as operates in Europe.

Executives

Wells Norman E Jr.	director	PO BOX 609, AURORA OH 44202
Alayne L Reitman	director	SIFCO INDUSTRIES INC, 970 EAST 64TH STREET, CLEVELAND OH 44103
Peter William Knapper	director, officer: President & CEO	5924 MEDALLION DRIVE, WESTERVILLE OH 43082
Molten Donald C Jr.	director	970 EAST 64TH STREET, CLEVELAND OH 44103
Mark J Silk	director, 10 percent owner	4946 AZUSA CANYON ROAD, IRWINDALE CA 91706
Hudson Smith	director	SIFCO INDUSTRIES INC, 970 EAST 64TH STREET, CLEVELAND OH 44103
Thomas Robert Kubera	officer: Corporate Controller	1327 SPRUCEDALE ROAD, BROADVIEW HEIGHTS OH 44147
Jeffrey P Gotschall	director	SIFCO INDUSTRIES INC, 970 EAST 64TH STREET, CLEVELAND OH 44103
Salvatore Incanno	officer: VP of Finance & CFO	970 E. 64TH ST, CLEVELAND OH 44103
John Sr Chapman	director	970 EAST 64TH STREET, CLEVELAND OH 44103
Dennis Paul Hido	officer: Corporate Controller	21 EMERALD COURT, CANFIELD OH 44406
Catherine Marie Kramer	officer: Vice President-Finance & CFO	14388 CASTLEREAGH LANE, STRONSVILLE OH 44136
Frank N Nichols	director	8646 CARDINAL DRIVE, KIRTLAND OH 44094
Frank A Cappello	officer: Vice President Finance and CFO	SIFCO INDUSTRIES INC, 970 EAST 64TH STREET, CLEVELAND OH 44103
Miller P Charles Jr	director	SIFCO INDUSTRIES INC, 970 EAST 64TH STREET, CLEVELAND OH 44103