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Free Cash Flow To Firm Calculator

Work out free cash flow to firm instantly with clear inputs, formula shown and shareable results.

About Free Cash Flow To Firm Calculator

FCFF is the cash available to all capital providers before financing flows. Start from EBIT, tax it at the effective rate to get NOPAT, add back non-cash depreciation and amortisation, then deduct the capital expenditure and working capital increase needed to sustain the business.

Formulas

FCFF

FCFF = EBIT x (1 - Tax rate) + D&A - Capex - Increase in working capital

Reinvestment rate

Reinvestment rate % = Reinvestment / NOPAT x 100

Worked example

With the default values below, Free Cash Flow To Firm Calculator returns Free cash flow to the firm of $472,500.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

EBIT
950,000
Effective tax rate
25
Depreciation and amortisation
180,000
Capex plus increase in working capital
420,000

Results

Free cash flow to the firm
$472,500.00
NOPAT (after-tax operating profit)
$712,500.00
Reinvestment (capex + working capital)
$420,000.00
Reinvestment rate
58.95%

Step by step

  1. 1Values used
  2. 2FCFF
  3. 3Reinvestment rate
  4. 4Free cash flow to the firm= 472,500.00
  5. 5NOPAT (after-tax operating profit)= 712,500.00
  6. 6Reinvestment (capex + working capital)= 420,000.00
  7. 7Reinvestment rate= 58.95

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why add back depreciation?

Because it reduced EBIT but no cash left the business. Actual cash spent on assets enters separately as capex.

Why is FCFF preferred to FCFE for valuation?

Because it is independent of leverage, so a change in capital structure does not change the enterprise value you compute.

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