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Business finance / Free Cash Flow Calculator

Free Cash Flow Calculator

US rates · checked 20 Oct 2026
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"Net cash from operating activities" on the cash flow statement. Example figure.

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Cash spent on equipment, vehicles, buildings and software. Shown as "purchases of property and equipment".

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For the free cash flow margin. Enter 0 to skip.

Free cash flow
$170,000.00
$14,166.67per month
11.3%FCF margin
32.0%capex share of cash flow
$0operating cash flow $250,000.00
  • Capital expenditures
  • Free cash flow
Operating cash flow$250,000.00
Capital expenditures−$80,000.00
Free cash flow$170,000.00

About $14,166.67 a month is left after investment: 11.3% of revenue, free for debt repayment, owner draws or savings.

See breakdown

How the free cash flow calculation works

Cash a business has left after paying for operations and investment, by the simple formula, FCFF or FCFE.

  1. Free cash flow = operating cash flow − capital expenditures

    Both figures are on the cash flow statement. $250,000 − $80,000 = $170,000.

  2. FCFF = EBIT × (1 − tax rate) + D&A − capex − increase in working capital

    Cash available to lenders and owners together. $200,000 × 0.79 + $40,000 − $80,000 − $10,000 = $108,000.

  3. FCFE = operating cash flow − capex + net borrowing

    Cash available to owners after lenders. $250,000 − $80,000 + $20,000 = $190,000.

  4. Divide by revenue for the FCF margin

    $170,000 ÷ $1,500,000 = 11.3% of every sales dollar ends up as free cash.

Worked example. A business with $250,000 of operating cash flow and $80,000 of capital spending has free cash flow of $170,000, or $14,166.67 a month. On $1,500,000 of revenue that is an 11.3% FCF margin.

Free Cash Flow FAQ

What is the free cash flow formula?

Free cash flow = operating cash flow − capital expenditures. For example, $250,000 of operating cash flow minus $80,000 of capex leaves $170,000.

How do you calculate free cash flow from net income?

Free cash flow = net income + depreciation and amortization − increase in working capital − capital expenditures. The first three items give you operating cash flow, roughly.

What is the FCFF formula?

FCFF = EBIT × (1 − tax rate) + depreciation and amortization − capital expenditures − increase in net working capital. It is also called unlevered free cash flow, because it is before any interest or loan payments.

What is the FCFE formula?

FCFE = operating cash flow − capital expenditures + net borrowing. It is also called levered free cash flow: what is left for owners after lenders are paid. From FCFF: FCFE = FCFF − interest × (1 − tax rate) + net borrowing.

What is the difference between levered and unlevered free cash flow?

Unlevered (FCFF) is before interest and debt repayments, so it belongs to lenders and owners together and is used for enterprise value. Levered (FCFE) is after them, so it belongs to owners only and is used for equity value.

Is free cash flow the same as net income?

No. Net income includes non-cash charges such as depreciation and ignores money spent on equipment. A profitable business can have negative free cash flow in a year of heavy investment.

What is a good free cash flow margin?

Higher is better, but it depends on the industry and how much the business is investing. Compare your own trend over several years rather than one year.

Sources: IRS Publication 542: Corporations (21% federal corporate tax rate)

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