Free cash flow is the cash available to repay debt, pay dividends, buy back shares or invest. Negative FCF isn’t always bad – growing companies often invest heavily.
How to use the Free Cash Flow Calculator
- Calculate from
- Operating cash flow
- EBIT
- Tax rate
- Depreciation and amortization
- Increase in working capital
- Capital expenditure
- Revenue
Results update as you type, and every field accepts the units shown in its menu.
How it works
Choose the method and enter the figures.
Tips
- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.
Common mistakes to avoid
- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.
Inputs explained
| Field | What to enter |
|---|---|
| Calculate from | Choose one: Operating cash flow, EBIT |
| Operating cash flow | Amount in your currency |
| EBIT | Amount in your currency |
| Tax rate | In % |
| Depreciation and amortization | Amount in your currency |
| Increase in working capital | Amount in your currency |
| Capital expenditure | Amount in your currency |
| Revenue | Amount in your currency |
Example values
How the main result changes when Operating cash flow changes and everything else stays at the example values above:
| Operating cash flow | Free cash flow |
|---|---|
| 300,000 | 80,000 |
| 450,000 | 230,000 |
| 600,000 | 380,000 |
| 750,000 | 530,000 |
| 900,000 | 680,000 |
| 1,200,000 | 980,000 |
Formula
FCF = operating cash flow − capital expenditureor FCF = EBIT × (1 − tax rate) + D&A − change in working capital − capexWorked example
Inputs — Calculate from: Operating cash flow; Operating cash flow: $600,000; EBIT: $500,000; Tax rate: 21 %; Depreciation and amortization: $150,000; Increase in working capital: $40,000; Capital expenditure: $220,000; Revenue: $3,000,000.
Results — Free cash flow = $380,000.00; FCF margin = 12.67 %.
Frequently asked questions
What is free cash flow?
Cash from operations minus capital expenditures.
Is negative free cash flow bad?
Not necessarily for a fast-growing company investing for the future.
What is FCF used for?
Valuation (DCF), dividends, buybacks and debt repayment.
What formula does the Free Cash Flow Calculator use?
FCF = operating cash flow − capital expenditure.