Free Cash Flow

Earning before interest and tax (EBIT), or operating income
%
Use current gross fixed assets subtract gross fixed assets in prior year
Use current year's NWC subtract NWC in prior year
Calculate

The inputs and calculated results are presented in the following Table:

Table 1: Free Cash Flow Calculation
Parameter Value Note
EBIT Earning before interest and tax (EBIT), or operating income
Tax Rate Average tax rate (%)
Depreciation Depreciation value
NFA Net fixed asset (NFA) or changes in gross fixed asset (GFA)
NWC Changes in net working capital (NWC)
Free Cash Flow Cash from operations - capital expenditures
On this page