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Free Cash Flow Calculator

Calculate free cash flow from a company's cash flow statement (operating cash flow minus capital expenditures) or from EBIT. The calculator also gives free cash flow to the firm (FCFF), free cash flow to equity (FCFE), FCF margin, FCF per share and FCF yield, with every step shown.

Last updated:

Start from
Cash flow figures
$

Net cash from operating activities.

$
$
$

Use a negative number if working capital fell.

$

Enter as a positive number.

For FCFF / FCFE
$
%
$

New debt issued minus debt repaid (negative if you paid down debt).

Ratios (optional)
$

Same units as the money figures (e.g. millions).

$

For FCF yield and price / FCF.

$

For year-over-year growth.

Enter your values to see the result.
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How to use the Free Cash Flow Calculator

  1. Choose your starting point: operating cash flow from the cash flow statement, or EBIT from the income statement.
  2. Enter capital expenditures as a positive number, plus D&A and the change in working capital if you start from EBIT.
  3. Add interest expense, tax rate and net borrowing to get FCFF and FCFE.
  4. Optionally enter revenue, shares, share price and last year's FCF for margin, per-share, yield and growth figures.
  5. Press Calculate and review the results, the working and the chart.

Free cash flow formulas

MeasureFormulaWho it belongs to
Free cash flow (simple)Operating cash flow − CapExCommon headline figure
FCFF from CFOCFO + interest × (1 − t) − CapExLenders and shareholders
FCFF from EBITEBIT × (1 − t) + D&A − CapEx − ΔNWCLenders and shareholders
FCFEFCFF − interest × (1 − t) + net borrowingShareholders only
FCF marginFCF ÷ revenueEfficiency ratio
FCF yieldFCF ÷ market capitalizationValuation ratio

t is the tax rate and ΔNWC the increase in net working capital (receivables plus inventory minus payables, roughly). Under US GAAP interest paid is part of operating cash flow, which is why it is added back, after tax, to get FCFF.

Worked example (figures in millions)

A company reports operating cash flow of $1,250, capital expenditures of $420, interest expense of $90, a 21% tax rate, net borrowing of $50, revenue of $6,000 and 200 million shares at $60.

  • FCF = 1,250 − 420 = $830
  • FCFF = 1,250 + 90 × 0.79 − 420 = $901.10
  • FCFE = 830 + 50 = $880
  • FCF margin = 830 ÷ 6,000 = 13.83%; FCF per share = 830 ÷ 200 = $4.15
  • FCF yield = 830 ÷ (60 × 200) = 6.92%, so price / FCF is about 14.5×

Reading free cash flow well

  • Look at several years. CapEx is lumpy, so one year can flatter or punish a company.
  • Watch stock-based compensation. It is a real cost to shareholders but is added back in operating cash flow; some analysts subtract it.
  • Separate growth and maintenance CapEx when you can; low FCF from investing in new capacity is different from low FCF because old assets need replacing.
  • Use FCFF in a DCF with WACC, or FCFE with the cost of equity; try the DCF calculator next.

Frequently asked questions

How do you calculate free cash flow?

The most common formula is free cash flow = cash from operating activities − capital expenditures. Both numbers are on the cash flow statement; CapEx usually appears as 'purchases of property, plant and equipment' in the investing section.

What is the difference between FCFF and FCFE?

Free cash flow to the firm (FCFF) is the cash available to all capital providers, lenders and shareholders, before interest payments. Free cash flow to equity (FCFE) is what is left for shareholders after paying after-tax interest and adding net new borrowing. FCFF is discounted at WACC and FCFE at the cost of equity.

What are the FCFF and FCFE formulas used here?

From operating cash flow: FCFF = CFO + interest × (1 − tax rate) − CapEx and FCFE = CFO − CapEx + net borrowing. From EBIT: FCFF = EBIT × (1 − tax rate) + D&A − CapEx − increase in working capital, and FCFE = FCFF − interest × (1 − tax rate) + net borrowing.

What is a good FCF margin?

FCF margin = free cash flow ÷ revenue. It varies a lot by industry: asset-light software firms can exceed 20%, while retailers, manufacturers and utilities often run in single digits. Compare a company with its own history and close peers.

Is negative free cash flow bad?

Not always. A young or fast-growing company may invest heavily in equipment or expansion, pushing FCF below zero for a while. Persistent negative FCF in a mature business, however, means it relies on borrowing or new shares to fund itself.

What is FCF yield?

FCF yield = free cash flow ÷ market capitalization (or FCF per share ÷ share price). A 5% yield means the company generates $5 of free cash flow a year for every $100 of market value. Its inverse is the price-to-FCF multiple.

Which units should I use?

Any, as long as they are consistent. If the financial statements are in millions, enter every money figure and the share count in millions and the per-share results will be correct.

Are all the tools on FreeToolCabin tested for quality and accuracy?

Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.

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