# Free Cash Flow Calculator

Calculate free cash flow from operating income, depreciation, taxes, working capital, and CapEx. Measure cash available for investors. Free calculator.

## What this calculates

Calculate how much cash your business generates after all operating expenses and capital investments. Enter operating income, depreciation, taxes, working capital changes, and CapEx to find free cash flow and operating cash flow.

## Inputs

- **Operating Income (EBIT)** ($) — Earnings before interest and taxes.
- **Depreciation & Amortization** ($) — min 0 — Total depreciation and amortization expense (non-cash).
- **Taxes Paid** ($) — min 0 — Actual taxes paid during the period.
- **Change in Working Capital** ($) — Increase in working capital (positive = cash outflow).
- **Capital Expenditures (CapEx)** ($) — min 0 — Spending on property, plant, equipment, and other long-term assets.
- **Revenue (optional)** ($) — min 0 — Enter revenue to calculate FCF margin.

## Outputs

- **Free Cash Flow** — formatted as currency — The cash available after operating expenses and capital investments.
- **Operating Cash Flow** — formatted as currency — Cash generated from operations before capital expenditures.
- **FCF Margin** — formatted as percentage — Free cash flow as a percentage of revenue (if provided).

## Details

Free Cash Flow (FCF) represents the cash a business generates after accounting for all operating expenses and capital investments needed to maintain or grow the business. The formula is: FCF = Operating Income + Depreciation & Amortization - Taxes - Change in Working Capital - Capital Expenditures. FCF is widely considered the best measure of a company's financial health because it shows actual cash generation.

Unlike net income, which can be manipulated through accounting choices, free cash flow focuses on real cash movements. A company can report positive earnings while burning cash (if it has high CapEx or growing working capital requirements), or vice versa. This is why investors often value companies based on FCF rather than earnings.

FCF margin (FCF / Revenue) indicates how efficiently a company converts revenue into free cash. Software companies often have FCF margins of 20-40% due to low capital requirements, while manufacturers might see 5-10%. Consistent positive FCF gives a company the flexibility to pay dividends, buy back shares, reduce debt, or invest in growth opportunities.

## Frequently Asked Questions

**Q: What is free cash flow?**

A: Free cash flow is the cash a business generates after paying for operations and maintaining its capital assets. It represents the cash available to return to shareholders (via dividends or buybacks), pay down debt, or invest in new opportunities. The formula is: FCF = Operating Cash Flow - Capital Expenditures.

**Q: Why is FCF more important than net income?**

A: FCF measures actual cash generation while net income is an accounting metric that includes non-cash items like depreciation, stock-based compensation, and accruals. A company can report positive net income while having negative FCF (and vice versa). Cash is what pays bills, dividends, and funds growth, making FCF a more reliable indicator of financial health.

**Q: What is a good FCF margin?**

A: FCF margins vary by industry. Software and technology companies often achieve 20-40% FCF margins. Consumer goods companies typically see 5-15%. Capital-intensive industries like utilities or manufacturing may have 3-8% margins. Any consistently positive and growing FCF margin is a good sign. Negative FCF is concerning unless the company is in a high-growth investment phase.

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Source: https://vastcalc.com/calculators/finance/free-cash-flow
Category: Finance
Last updated: 2026-04-21