Free Cash Flow Calculator: FCF, FCFF (Unlevered) and FCFE (Levered)
Calculate free cash flow from cash from operations, net income, EBIT or EBITDA, with FCFF, FCFE, FCF per share, FCF yield and margin, and the full build-up.
How it works
FCF = cash from operations − capital expenditures · FCFF = CFO + interest × (1 − t) − CapEx = NI + D&A + interest × (1 − t) − CapEx − ΔNWC = EBIT × (1 − t) + D&A − CapEx − ΔNWC = EBITDA × (1 − t) + D&A × t − CapEx − ΔNWC · FCFE = FCFF − interest × (1 − t) + net borrowing = CFO − CapEx + net borrowing
Free cash flow is the cash a business has left after paying for its operations and the investment in equipment, buildings and software it needs to keep going. The everyday version is cash from operations minus capital expenditures. Analysts also use two stricter versions: free cash flow to the firm (FCFF, also called unlevered FCF) is the cash available to everyone who funds the company, lenders and shareholders, so it adds back interest after tax; free cash flow to equity (FCFE, levered FCF) is what is left for shareholders after interest and after any new borrowing or repayment. You can start from whichever figure you have. From net income, add back depreciation and other non-cash charges and subtract the increase in working capital to reach cash from operations. From EBIT or EBITDA, the calculator taxes operating profit at your rate and rebuilds the same chain, so all four starting points agree when the inputs are consistent. The build-up table shows every line, and under More options you can add shares, price and revenue for FCF per share, FCF yield, price-to-FCF and FCF margin. The EBIT and EBITDA routes assume taxes are your rate times pre-tax income and that there are no other non-operating items; for a real filing, starting from cash from operations is the most exact. Unlike the free cash flow yield calculator, which needs FCF as an input, this one works FCF out from the statements; for valuing a company from forecast FCF, use the DCF calculator.
Worked example
A company reports $42,000,000 of cash from operations and spends $18,000,000 on capital expenditures, so free cash flow is $42,000,000 − $18,000,000 = $24,000,000. Its interest expense is $4,000,000 and its tax rate 25%, so after-tax interest is $3,000,000 and FCFF = $42,000,000 + $3,000,000 − $18,000,000 = $27,000,000. It borrowed a net $5,000,000, so FCFE = $27,000,000 − $3,000,000 + $5,000,000 = $29,000,000. With 10,000,000 shares at $40, FCF per share is $2.40, the FCF yield is $24,000,000 ÷ $400,000,000 = 6.00% and price-to-FCF is 16.7×. On $250,000,000 of revenue the FCF margin is 9.60%.
Sources: Omni Calculator: Free cash flow (FCF = OCF − CapEx, per share and yield) · Omni Calculator: Free cash flow to the firm (four methods, Company Alpha example) · Omni Calculator: Free cash flow to equity (net borrowing, Company Alpha example)
Frequently asked questions
What is the difference between FCF, FCFF and FCFE?
FCF is the simple version: cash from operations minus capital spending. FCFF (unlevered) adds back after-tax interest, so it is the cash available to both lenders and shareholders and is used to value the whole firm with WACC. FCFE (levered) subtracts after-tax interest and adds net borrowing, so it is the cash available to shareholders only and is discounted at the cost of equity.
Can free cash flow be negative?
Yes. It is negative when capital expenditures exceed the cash that operations bring in. Young, fast-growing or capital-intensive companies often have negative FCF for years. Persistent negative FCF in a mature company is a warning sign because it has to be financed by debt or new shares.
How do I calculate free cash flow from net income?
Add back depreciation, amortization and other non-cash charges, subtract the increase in working capital (or add a decrease), then subtract capital expenditures. For FCFF also add interest × (1 − tax rate); for FCFE add net borrowing instead.
Where do I find the numbers?
Cash from operations and capital expenditures (often called purchases of property and equipment) are on the cash flow statement. Interest expense and the effective tax rate come from the income statement, and net borrowing is debt issued minus debt repaid in the financing section.
What is a good free cash flow yield?
There is no fixed cut-off, but many investors treat an FCF yield above the 10-year government bond yield as attractive and compare it with peers. A very high yield can also mean the market expects cash flow to fall.
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Educational estimate, not investment advice. Check figures against the company’s filed statements before relying on them.