Free Cash Flow to Firm (FCFF) Calculator

Calculate Free Cash Flow to Firm to assess a company's ability to generate cash for all capital providers.

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Calculate FCFF

Enter financial data to calculate Free Cash Flow to Firm using three approaches (EBIT, Net Income, EBITDA). All monetary values should be in the selected currency.

FCFF Formulas

1. EBIT Approach: FCFF = EBIT × (1 - Tax Rate) + Depreciation - CapEx - ΔNWC

2. Net Income Approach: FCFF = Net Income + (Interest × (1 - Tax Rate)) + Depreciation - CapEx - ΔNWC

3. EBITDA Approach: FCFF = EBITDA - Taxes - CapEx - ΔNWC

Where EBIT is Earnings Before Interest and Taxes, CapEx is Capital Expenditures, ΔNWC is Change in Net Working Capital, and Taxes are actual taxes paid.

Financial Inputs

Select the currency for all monetary inputs (e.g., USD, GHS).
Earnings Before Interest and Taxes from income statement.
Corporate tax rate as a percentage (e.g., 25%).
Depreciation and amortization from income statement.
Capital expenditures from cash flow statement.
Change in net working capital (can be positive or negative).
Net income from income statement.
Interest expense from income statement.
Earnings Before Interest, Taxes, Depreciation, and Amortization.
Actual taxes paid from income statement.

Understanding FCFF

Free Cash Flow to Firm (FCFF) measures the cash a company generates for all capital providers (debt and equity holders) after operating expenses, taxes, and investments in capital and working capital.

Positive FCFF

Strong Financial Health

Positive FCFF indicates the company generates sufficient cash to cover investments and obligations, supporting growth or debt repayment.

Negative FCFF

Potential Financial Strain

Negative FCFF may signal cash flow issues, reliance on external financing, or heavy investment phases.

How to Use the FCFF Calculator

  1. Select Currency

    Choose the currency for all monetary inputs (e.g., USD, GHS).

  2. Input Financial Data

    Enter the following data (find on gse.com.gh, Yahoo Finance, or annual reports):

    • EBIT: Earnings Before Interest and Taxes from income statement.
    • Tax Rate: Corporate tax rate as a percentage (e.g., 25%).
    • Depreciation: Depreciation and amortization from income statement.
    • Capital Expenditures (CapEx): Capital expenditures from cash flow statement.
    • Change in Net Working Capital (ΔNWC): Change in net working capital from cash flow statement (can be positive or negative).
    • Net Income: Net income from income statement.
    • Interest Expense: Interest expense from income statement.
    • EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization.
    • Taxes: Actual taxes paid from income statement.
  3. Calculate FCFF

    Click "Calculate" to compute FCFF using three approaches.

  4. Review Results

    The results section displays:

    • FCFF Results: FCFF calculated via EBIT, Net Income, and EBITDA approaches.
    • Interpretation: Analysis of results, with consistent values indicating accurate inputs.
  5. Reset and Recalculate

    Use the "Clear" button to reset inputs or "Calculate Another" in the results section.

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