Free Cash Flow to Firm Calculator

What is Free Cash Flow to Firm (FCFF)?

Free Cash Flow to Firm (FCFF), also referred to as Unlevered Free Cash Flow, represents the total cash generated by a business that is available to all providers of capital, including both equity holders and debt holders, after paying operating expenses, taxes, and capital investments.

FCFF Formulas

Depending on the starting financial statement line item, FCFF can be calculated using the following formulas:

• From EBIT (Operating Income): $$\text{FCFF} = \text{EBIT} \times (1 - t) + \text{D\&A} - \Delta\text{Working Capital} - \text{CapEx}$$
• From Net Income: $$\text{FCFF} = \text{Net Income} + \text{D\&A} + \text{Interest Expense} \times (1 - t) - \Delta\text{Working Capital} - \text{CapEx}$$
• From Operating Cash Flow (OCF): $$\text{FCFF} = \text{OCF} + \text{Interest Expense} \times (1 - t) - \text{CapEx}$$

Difference Between FCFF and FCFE

FCFF measures cash flow before debt service, representing the firm's total enterprise cash generation. In contrast, Free Cash Flow to Equity (FCFE) measures cash flow remaining specifically for shareholders after debt interest and principal obligations are satisfied.