Free Cash Flow Calculator — FCF, Margin & Yield
Free cash flow (FCF) measures the cash a business generates after paying for capital investments. Enter operating cash flow and CapEx to find FCF, and optionally add revenue or market cap to calculate FCF margin and yield.
Cash remaining after funding capital expenditures from operating cash flow
380,000
FCFFree cash flow
76%
Capital expenditures
24%
- 1
Operating cash flow
500,000 - 2
Subtract capital expenditures
500,000 − 120,000 = 380,000Free cash flow is what remains after paying for all capital investments.
How does this calculator work?
Free cash flow = Operating Cash Flow − CapEx. It measures cash available after funding the asset base needed to run the business. A positive and growing FCF signals financial strength; FCF margin and FCF yield let you compare companies of different sizes and across industries.
Formula
How this is calculated
Free cash flow strips out the capital spending required to maintain or grow a business from its operating cash generation. Operating cash flow (OCF) comes from the cash flow statement and represents cash from core business activities — it already excludes depreciation and non-cash charges. Capital expenditures (CapEx) are actual cash outflows for long-lived assets such as property, plant, equipment, and purchased software. Subtracting CapEx from OCF gives the residual cash the company can deploy freely — to pay dividends, reduce debt, buy back shares, or invest in acquisitions.
FCF margin (FCF ÷ Revenue) shows what percentage of sales converts to free cash, a cross-company comparability metric. FCF yield (FCF ÷ Market Cap) is the inverse of a price-to-FCF multiple and measures cheapness relative to cash generation — higher yield suggests more cash return per dollar of market price. FCF conversion rate (FCF ÷ OCF) shows how efficiently operating cash is preserved after CapEx.
Note that FCF can be negative during heavy investment phases — that is not necessarily bad if CapEx is building future growth capacity. Analysts usually normalise for one-off CapEx spikes by averaging over several years.
Frequently asked questions
FCF shows how much cash a company genuinely has available — after maintaining its asset base — for debt repayment, dividends, buybacks, or acquisitions. It is a key valuation metric in discounted cash flow (DCF) models.
Net income includes non-cash items like depreciation and accruals, while FCF is based on actual cash movements. A profitable company can have low or negative FCF if it is investing heavily in new assets.
There is no universal threshold — it varies widely by industry. Asset-light software companies often achieve 20–30 % FCF margins, while capital-intensive manufacturers may operate at 2–8 %. Trends over time and comparisons with peers are more meaningful than the absolute figure.
Also known as
TG we-Calculate Editorial Team. (2026). Free Cash Flow Calculator — FCF, Margin & Yield [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/free-cash-flow-calculator
TG we-Calculate Editorial Team. "Free Cash Flow Calculator — FCF, Margin & Yield." TG we-Calculate. 2026. https://we-calculate.com/calculator/free-cash-flow-calculator.
TG we-Calculate Editorial Team, "Free Cash Flow Calculator — FCF, Margin & Yield," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/free-cash-flow-calculator
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