Unlevered Free Cash Flow Calculator

Build FCFF from EBIT, tax, D&A, CapEx, and the change in net working capital.

Enter EBIT, tax as a decimal, depreciation, CapEx, and NWC change to calculate unlevered free cash flow.

Unlevered Free Cash Flow Calculator
Build FCFF from EBIT, tax, D&A, CapEx, and the change in net working capital.

About Unlevered Free Cash Flow

Unlevered free cash flow, or free cash flow to the firm (FCFF), is cash from operations before interest, after tax on EBIT, after reinvestment in capital expenditures and working capital. Enterprise DCF models discount this series at WACC. The unlevered free cash flow calculator uses EBIT × (1 − tax) + depreciation and amortization − CapEx − the change in net working capital. Tax rate is a decimal between 0 and 1, so 21% is 0.21. With EBIT $100,000, tax 0.21, D&A $15,000, CapEx $20,000, and a $5,000 NWC increase, UFCF is $100,000 × 0.79 + $15,000 − $20,000 − $5,000 = $69,000. With EBIT $50,000, tax 0.25, D&A $8,000, CapEx $10,000, and NWC +$2,000, UFCF is $33,500. With EBIT $200,000, tax 0.21, D&A $40,000, CapEx $60,000, and an NWC decrease of $10,000 (enter −10000), UFCF is $148,000 because a working-capital release is a cash inflow. Enter CapEx as a positive spend. Enter NWC change as the increase in net working capital; a positive number reduces cash. D&A is added back because EBIT is after that non-cash charge. Do not subtract interest or debt principal; that would lever the cash flow. Do not add optional cash if you are building FCFF for WACC discounting. The identity omits after-tax non-operating items, stock-based compensation add-backs, and changes in deferred tax that some models include. Tax on EBIT is a simple NOPAT approximation and ignores interest tax shields, which WACC is supposed to capture instead. Recalculate when the forecast year changes, and keep the tax convention (decimal, not percent) next to the workbook so a later 21 versus 0.21 error does not silently zero NOPAT. Align the period for every line: annual EBIT with annual CapEx, not annual EBIT with a quarterly working-capital change. If you annualize a stub year, scale each component rather than only EBIT. Stock-based compensation is ignored here; if your house model treats it as a cash cost, subtract it outside this identity. Keep units identical so a $100,000 EBIT is not mixed with CapEx entered in millions.

Unlevered FCF Worked Examples

UFCF = EBIT × (1 − tax decimal) + D&A − CapEx − ΔNWC. Tax 0.21 means 21%.

InputsResultInterpretation
EBIT 100000, tax 0.21, D&A 15000, CapEx 20000, ΔNWC 500069,000NOPAT is $79,000; reinvestment of $10,000 net of D&A and NWC leaves $69,000.
EBIT 50000, tax 0.25, D&A 8000, CapEx 10000, ΔNWC 200033,500A 25% tax on EBIT produces $37,500 NOPAT and $33,500 UFCF.
EBIT 200000, tax 0.21, D&A 40000, CapEx 60000, ΔNWC -10000148,000A working-capital release adds $10,000 of cash versus an NWC increase.

How to Calculate Unlevered Free Cash Flow

  1. Enter EBIT for the forecast period.
  2. Enter the tax rate as a decimal between 0 and 1, such as 0.21.
  3. Enter D&A, CapEx as a positive spend, and the change in net working capital.
  4. Select Calculate to see unlevered free cash flow for that period.

Unlevered Free Cash Flow Calculator FAQ

Why is tax a decimal instead of a percent?

The formula multiplies EBIT by (1 − tax) with tax on a 0–1 scale. Enter 0.21 for 21%. Entering 21 is rejected because it is greater than 1.

Is this FCFF or FCFE?

It is FCFF (unlevered). FCFE would subtract after-tax interest and net debt payments. Do not mix the two when you choose a discount rate.

Should CapEx be positive or negative?

Enter capital expenditures as a positive number. The formula subtracts them. A negative CapEx would treat spending as a cash inflow.

What sign is the working-capital change?

Enter an increase in NWC as a positive number (use of cash). Enter a decrease as a negative number (source of cash).

Does this include interest tax shields?

No. NOPAT taxes EBIT as if the firm had no interest. In a WACC DCF those shields are in the discount rate, not in UFCF.