Enter the net income, capital expenditures, depreciation, and changes in working capital into the calculator. The calculator will evaluate and display the free cash flow.

Free Cash Flow Formula

The following equation can be used to calculate the free cash flow of a business.

FCF = (NI + D – WC) – CE

  • Where FCF is free cash flow
  • NI is net income
  • D is deprecation
  • WC is change in working capital
  • CE is capital expenditure

Free Cash Flow Definition

Free cash flow is defined as the total free cash after expenses and working capital are accounted for.

Free Cash Flow Example

How to calculate free cash flow?

  1. First, determine the net operating income

    This will be your total revenue generated by your business.

  2. Next, determine the depreciation

    Determine the total value of deprecation of the assets in your business.

  3. Next, determine the change in working capital

    Calculate your change in working capital over the time period being analyzed.

  4. Next, determine the capital expenditures

    This should be equal to your total operating expenses.

  5. Finally, calculate the free cash flow

    Calculate the free cash flow of your business or asset using the information from steps 1-4 and the formula above.

FAQ

What is free cash flow?

Free cash flow is the total cash, or money, that you have available to spend after all expenses and depreciation is accounted for.

free cash flow calculator
free cash flow formula