FCFF (Free Cash Flow to the Firm)
Cash generated by a business after operating costs, taxes and reinvestment, available to all capital providers before any interest or debt payments.
FCFF starts from EBITDA and subtracts cash taxes, capital expenditures and any increase in working capital, arriving at the cash the business could pay out to both its lenders and its owners. It is the cash flow used in a standard, unlevered discounted cash flow valuation, discounted at the weighted average cost of capital to reach enterprise value.
FCFF differs from free cash flow to equity, which is FCFF after interest and debt principal payments, available only to shareholders and discounted at the cost of equity instead of WACC.
Calculate your own fcff (free cash flow to the firm) instantly, free.
Open the calculator →