Free Cash Flow to Firm (FCFF) Calculator

FCFF is the free cash flow available to all of a company’s capital providers — shareholders and lenders (creditors) — after the company pays operating costs, taxes, capital expenditure (capex), and working capital needs. Example: with operating cash flow (CFO) of 600, after-tax interest expense of 75, and capex of 200, FCFF = 600 + 75 − 200 = 475.

FCFF = CFO + interest expense × (1 − tax rate) − capital expenditure (capex). Interest expense is added back because operating cash flow is already reduced by interest, while FCFF measures cash for all capital providers including creditors. The (1 − tax rate) multiplier adjusts for the tax saving on interest. Example: CFO 600, interest 100, 25% tax, capex 200 → FCFF = 600 + 100 × (1 − 0.25) − 200 = 600 + 75 − 200 = 475.

FCFF = EBIT × (1 − tax rate) + depreciation and amortization − capex − increase in working capital. EBIT × (1 − tax rate) is called net operating profit after tax (NOPAT). Example: EBIT 800 at 25% tax → NOPAT = 600; add depreciation 150, subtract capex 200, subtract working capital increase 50 → FCFF = 600 + 150 − 200 − 50 = 500.

All three measure free cash flow but from different perspectives. General FCF = operating cash flow − capex, with no interest adjustment. FCFF = cash for all capital providers (shareholders and creditors), computed by adding back after-tax interest. FCFE = cash remaining specifically for shareholders: FCFF − interest × (1 − tax) + net borrowing. Bridge example: FCFF 500 − after-tax interest 75 + net borrowing 100 = FCFE 525.

See also: Free Cash Flow (FCF) Calculator — for general FCF with no interest adjustment.

In discounted cash flow (DCF) valuation, analysts project FCFF several years ahead and discount it using the weighted average cost of capital (WACC) to estimate enterprise value. FCFF is used because it measures cash for all capital providers, matching WACC, which reflects the blended cost of equity and debt. This is an educational concept; this calculator does not assess the merit of any investment.

Because interest reduces taxable income, the company gains a tax saving equal to interest × tax rate. The interest cost actually borne by the company is only interest after that tax saving: interest × (1 − tax rate). Example: interest 100 at 25% tax → tax saving 25, after-tax interest = 75. This is the figure added back to CFO, or subtracted from FCFF in the bridge to FCFE.

Negative FCFF means cash outflows (capital expenditure and working capital needs) exceeded cash generated by operations in that period. This is common for companies expanding aggressively or investing heavily, and it is not a good-or-bad verdict on its own — its meaning depends on the overall financial-statement context.