Free Cash Flow (FCF) Formula

Free cash flow, abbreviated as FCF is estimated to evaluate the cash that a company would be able to generate after laying out the money required to maintain its asset base. It is calculated by adding the Net Income of the company with Depreciation / Amortization - Change in Net Working Capital - Capital Expenditure.

Free Cash Flow to Firm (FCFF) Formula


f = n - c - d + a


f = Free Cash Flow
n = Net Income
c = Capital Expenditures
d = Changes in Working Capital
a = Amortization / Depreciation

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Free Cash Flow can also be termed as Free Cash Flow to Firm which is abbreviated as FCFF.

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