Cash conversion: what it is and how to read it
It measures what share of accounting profit turns into real cash. A company can book profits it takes a long time to collect or must reinvest right away; this figure reveals it.
How it is calculated
Cash conversion = free cash flow / net income.
How to read it
Around or above 100%, profit reaches the bank in full: a good quality sign. Below 50% for several years, it is worth understanding why.
Cash conversion in the MeridIAn ranking
Among the 1,524 companies in the ranking with data, the median Cash conversion is 46%: half are below and half above. The lowest 25% are below 24% and the highest 25% above 65%.
For example: NVIDIA, 21%; Apple, 64%; Alphabet, 13%; Inditex, 66%.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 35% | 133 |
| Communication Services | 58% | 91 |
| Consumer Cyclical | 46% | 212 |
| Consumer Defensive | 44% | 123 |
| Energy | 28% | 97 |
| Healthcare | 51% | 172 |
| Industrials | 49% | 366 |
| Technology | 62% | 242 |
| Utilities | −32% | 88 |
Highest Cash conversion
What to watch out for
In years of heavy investment for growth it can be low without being a problem. With negative earnings it loses meaning.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.