Free Cash Flow Calculator
Calculate free cash flow from operating cash flow and capital expenditures, with the free cash flow margin against revenue.
Last reviewed by the Radiatus Cloud team
Calculate free cash flow, the cash a business generates after capital spending.
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Calculate free cash flow
Free cash flow, or FCF, is the cash a business generates from its operations after subtracting the capital expenditures needed to maintain and grow its asset base. It is calculated by taking operating cash flow and subtracting capital expenditures. Free cash flow represents the money genuinely available to pay down debt, return to shareholders through dividends and buybacks, or reinvest in new opportunities. If you enter revenue, the calculator also shows the free cash flow margin, the percentage of sales that converts into free cash.
Unlike accounting profit, free cash flow is based on actual cash movements, making it harder to distort.
Why free cash flow matters
Many investors regard free cash flow as a truer measure of financial health than net income, because it reflects the real cash a business produces rather than accounting figures affected by non-cash items. Consistent, growing free cash flow gives a company flexibility and resilience, while negative free cash flow means it is spending more than it brings in and may need outside funding.
Free cash flow also underpins valuation methods such as discounted cash flow analysis, which values a company based on the free cash it is expected to generate. Compare FCF over time and against peers for the clearest picture. All calculation happens locally in your browser.
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Frequently Asked Questions
What is the free cash flow formula?
Free cash flow equals operating cash flow minus capital expenditures, the cash left after investing to maintain and grow the asset base.
Why is free cash flow important?
It shows the real cash available to repay debt, pay dividends, buy back shares or reinvest, and is harder to distort than accounting profit.
What is the FCF margin?
It is free cash flow divided by revenue, showing what percentage of sales converts into free cash. A higher margin indicates strong cash generation.
What does negative free cash flow mean?
It means the company spends more on operations and capital than it generates, which may be fine for a growth phase but requires funding.
How is FCF used in valuation?
Discounted cash flow analysis values a company based on its expected future free cash flows, making FCF central to intrinsic valuation.
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How to Use
Enter operating cash flow, capital expenditures and revenue.
Disclaimer: This tool is provided "as is" without warranty of any kind. Results are for educational and utility purposes.
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