Free Cash Flow (FCF) Calculator

Free cash flow (FCF) is the cash left over from operating activities after the company pays capital expenditure (capex) such as machinery, buildings, or equipment. The formula: FCF = operating cash flow − capital expenditure. Example: with operating cash flow of Rp500 million and capital expenditure of Rp200 million, FCF = Rp300 million. This figure is computed directly by mode 1 of the calculator above.

The formula: FCF = net income + depreciation and amortization − increase in working capital − capital expenditure. An increase in working capital drains cash (e.g. inventory piling up or receivables swelling), while a decrease releases cash. Example: net income Rp400 million + depreciation Rp100 million − working capital increase Rp50 million − capital expenditure Rp200 million = FCF Rp250 million. Mode 2 of the calculator above uses this formula.

All three measure free cash from different perspectives. General FCF — like this calculator computes — is operating cash minus capital expenditure. FCFF (free cash flow to firm) is the cash available to all capital providers: shareholders and lenders. FCFE (free cash flow to equity) is the cash remaining specifically for shareholders after paying interest and debt installments. This calculator computes core FCF; FCFF and FCFE are advanced concepts in valuation analysis.

Net income is computed on an accrual basis: it includes revenue whose cash has not been received and non-cash expenses such as depreciation. FCF measures actual cash truly available. A company can report positive net income but negative FCF, for example when cash is tied up in receivables or inventory, or when capital expenditure is large. Example: net income of Rp400 million can produce FCF of only Rp250 million after adding depreciation of Rp100 million then subtracting a working capital increase of Rp50 million and capital expenditure of Rp200 million.

Negative FCF means capital expenditure exceeds operating cash flow. Example: operating cash flow of Rp500 million with capital expenditure of Rp700 million produces FCF of Rp−200 million. That means the company is burning cash in that period. This is not necessarily bad — it may be investing for expansion. But if it persists without a sustainable funding source, its financial condition deserves closer scrutiny.

FCF margin = FCF divided by revenue × 100%, measuring the efficiency of converting sales into free cash. Example: FCF of Rp300 million from revenue of Rp2,000 million produces a 15% margin. FCF yield = FCF divided by market capitalization × 100%, comparing free cash to the company’s market value. Example: FCF of Rp300 million with a market capitalization of Rp5,000 million produces a 6% FCF yield. Mode 3 of the calculator above compares two companies on these metrics.

Not automatically. Positive FCF shows the company generates more cash than it spends on assets, but investment appraisal also weighs debt, growth prospects, management quality, share price relative to valuation, and industry risk. This calculator is educational for understanding the numbers, not for assessing investment merit. All results on this page are educational estimates, not investment advice.