Unlevered Free Cash Flow Calculator (UFCF / FCFF)
Compute Unlevered Free Cash Flow (UFCF), also called Free Cash Flow to Firm (FCFF) — the cash a business generates for all capital providers before any financing payments. This is the core cash-flow input discounted in a DCF enterprise-value model.
%
Free cash flow available to all capital providers, before financing
- 1
NOPAT (EBIT after tax)
500,000 × (1 − 0.25) = 375,000Net Operating Profit After Tax — operating profit as if all-equity financed. - 2
Add D&A (non-cash add-back)
375,000 + 80,000 = 455,000 - 3
Deduct ΔWC
455,000 − 20,000 = 435,000 - 4
Deduct CapEx → UFCF
435,000 − 100,000 = 335,000
How does this calculator work?
UFCF = EBIT × (1 − t) + D&A − ΔWC − CapEx. It is cash flow available to all capital providers, used as the discount base in DCF models (discounted at WACC → enterprise value). For EBIT = 500,000, tax = 25%, D&A = 80,000, ΔWC = 20,000, CapEx = 100,000: UFCF = 335,000.
Formula
How this is calculated
Unlevered free cash flow (UFCF or FCFF) measures cash generated by a business independently of how it is financed. Starting from EBIT (earnings before interest and taxes), you apply the tax rate to get NOPAT — the operating profit on an all-equity basis with no interest tax shield. You then add back D&A because it is a non-cash accounting charge that reduced EBIT but did not consume cash. Next you subtract the change in working capital (an increase in trade receivables, inventory, or prepayments consumes cash even though it is not in EBIT) and subtract capital expenditure (the real cash cost of maintaining and growing the asset base).
The resulting UFCF belongs to all capital providers — both debt and equity — before any interest payments, principal repayments or dividends. Discounting a forecast of annual UFCFs at the WACC gives enterprise value, from which you subtract net debt to reach equity value. Negative UFCF is common and normal for high-growth or capital-intensive firms investing ahead of their cash generation.
Note that the formula assumes the tax rate applies to EBIT directly (the Miles–Ezzell / WACC approach, where the tax shield is valued at WACC, not risk-free rate). For firms with significant net operating losses or R&D capitalisation, adjustments to EBIT may be needed before applying this formula. Figures are typically sourced from the most recent 12-month income statement and cash-flow statement.
Frequently asked questions
Unlevered FCF (FCFF) is available to all capital providers and is used to find enterprise value when discounted at WACC. Levered FCF (FCFE or free cash flow to equity) deducts interest and debt repayments first, leaving only what belongs to equity holders — discounted at the cost of equity to give equity value directly.
Depreciation and amortisation are non-cash expenses that reduce EBIT on the income statement but involve no cash outflow in the current period. Adding them back converts accounting profit to cash-based operating profit. The actual capital spending is captured by CapEx separately, which does represent real cash going out.
Negative UFCF means the business is consuming more cash than it generates from operations — typically because CapEx or working-capital investment exceeds NOPAT + D&A. For mature businesses this can signal trouble, but for growth-stage companies investing heavily in infrastructure or inventory, negative UFCF is expected and even desirable if returns on those investments are high.
Also known as
TG we-Calculate Editorial Team. (2026). Unlevered Free Cash Flow Calculator (UFCF / FCFF) [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/unlevered-free-cash-flow-calculator
TG we-Calculate Editorial Team. "Unlevered Free Cash Flow Calculator (UFCF / FCFF)." TG we-Calculate. 2026. https://we-calculate.com/calculator/unlevered-free-cash-flow-calculator.
TG we-Calculate Editorial Team, "Unlevered Free Cash Flow Calculator (UFCF / FCFF)," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/unlevered-free-cash-flow-calculator
@misc{wecalculate_unlevered_free_cash_flow_calculator, title = {Unlevered Free Cash Flow Calculator (UFCF / FCFF)}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/unlevered-free-cash-flow-calculator}}, year = {2026}, note = {TG we-Calculate} }
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