Unlevered Free Cash Flow (UFCF) Calculator
UFCF Calculator
Calculate Unlevered Free Cash Flow (UFCF). All values should be entered in the same units (e.g., millions of dollars).
Calculation Results
UFCF represents the cash flow available to *all* capital providers (debt and equity) after accounting for operating expenses, taxes, and investments in working capital and fixed assets.
Simply put, FCFF shows how much free cash a company would have available for shareholders and investors if it were completely debt-free or Unlevered Free Cash Flow, also known as Free Cash Flow to Firm (FCFF), is a measure that shows how much cash a company has left after operations, excluding interest and debt payments.
What is Unlevered Free Cash Flow (UCF) and how is it calculated?
If you’re interested in any kind of finance or business analysis, unlevered free cash flow (UFCF) is a crucial concept to understand because it’s a financial metric that measures how much cash a company generates from its own operations without including the impact of debits (loans).
I’ll explain in detail what the formula is, the calculation process, and its significance.
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Why is UFQF important?
- Helpful for valuation: UFCF is a very useful metric if you need to calculate a company’s valuation, especially in the discounted cash flow (DCF) model.
2. Debit-free analysis: This metric helps you determine how much money a business is earning from operations because the metric removes the impact of debits, giving you a clearer picture.
3. Investor decision-making: Investors use UFCF to assess whether a company’s core operations are profitable.
Unlevered Free Cash Flow Formula
The simple formula to calculate UFCF is:
UFCF = EBIT × (1 – Tax Rate) + Depreciation & Amortization – Change in Working Capital – Capital Expenditures
- EBIT (Earnings Before Interest and Taxes): Operating profit
- Tax Rate: Applicable corporate tax percentage
- Depreciation & Amortization: Non-cash expenses
- Change in Working Capital: difference between current assets and liabilities
- Capital Expenditures (CapEx): Investments made on fixed assets (machines, buildings, etc.)
Example: UFCF Calculation Step-by-Step
| Particulars | Amount ($ in Crores) |
|---|---|
| EBIT (Operating Profit) | $100 |
| Tax Rate | 30% |
| Depreciation & Amortization | $10 |
| Change in Working Capital | $5 |
| Capital Expenditure | $15 |
Step 1 EBIT × (1 – Tax Rate)
= 100 × (1 – 0.30) = $70
Step 2: Add Depreciation & Amortization
= $70 + $10 = $80
Step 3: Subtract Change in Working Capital
= $80 – $5 = $75
Step :4 Subtract Capital Expenditures
= $75 – $15 = $60
UFCF aur Levered Free Cash Flow (LFCF) me Difference
| Basis | Unlevered Free Cash Flow (UFCF) | Levered Free Cash Flow (LFCF) |
|---|---|---|
| Meaning | Debt ke impact ke bina cash flow | Debt aur interest ke baad bacha hua cash |
| Users | Company valuation, investors | Equity holders |
| Use in DCF | FCFF calculation me | FCFE calculation me |
| Risk Reflection | Lower risk (neutral) | Reflects financial leverage risk |
Reference link: wallstreetprep.com
UFCF Calculator Kaise Use Kare?
- EBIT (Operating Profit)
- Tax Rate(%)
- Depreciation & Amortization
- Change in Working Capital
- Capital Expenditure
Calculator will automatically show your UFCF Result — instantly and accurately.