Free Cash Flow Calculator

Formula

To calculate the Free Cash Flow ($FCF$):

\[ FCF = (NI + D - WC) - CE \]

Where:

$FCF$ is the Free Cash Flow
$NI$ is the Net Income
$D$ is the Depreciation
$WC$ is the Change in Working Capital
$CE$ is the Capital Expenditure

What is Free Cash Flow?

Free cash flow is a financial metric that indicates the amount of cash a company generates after deducting its operating expenses and capital expenditures. It represents the cash available to the company for various purposes, such as expansion, debt payment, dividends, or investment in new projects.

Example Calculation

Let's assume the following values:

Net Income ($NI$) = $100,000
Depreciation ($D$) = $20,000
Change in Working Capital ($WC$) = $10,000
Capital Expenditure ($CE$) = $30,000

Using the formula:

\[ FCF = (100,000 + 20,000 - 10,000) - 30,000 = 80,000 \]

The Free Cash Flow is $80,000.