Free Cash Flow (FCF)
FCF = EBIT(1−T) + D&A − CapEx − ΔNWC. Cash available to all capital providers.
Result
Free Cash Flow
$345
NOPAT $395 + D&A $80 − CapEx $100 − ΔNWC $30.
- EBIT$500
- Tax (T)21.0%
- NOPAT = EBIT(1−T)$395
- D&A$80
- CapEx$100
- ΔNWC$30
- FCF$345
Step-by-step
- NOPAT = 500 × (1 − 0.21) = $395.
- FCF = NOPAT + D&A − CapEx − ΔNWC = 395 + 80 − 100 − 30 = $345.
How to use this calculator
- Enter EBIT and tax rate.
- D&A, CapEx, ΔNWC from cash flow statement.
- Read FCF.
About this calculator
Free Cash Flow to the Firm (FCFF or "unlevered FCF") = cash available to debt + equity holders before financing decisions. Used in DCF valuation. Add back D&A (non-cash), subtract CapEx (cash outflow), subtract working-capital investment. Variants: FCFE (free cash flow to equity) = FCFF − interest × (1−T) − net debt repayment. FCF margin (FCF / revenue) is a quality metric: 10%+ is healthy.
Frequently asked
Increases in working capital tie up cash. ΔNWC = Δ(current assets − current liabilities). Cash invested in inventory/AR isn't available.
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