Unlevered FCF Calculator
The formula
What the unlevered free cash flow tells you
Cash flow available to all capital providers — debt and equity together — independent of how the business is financed. The quantity a DCF discounts at WACC.
Calculation: FCFF = EBIT × (1 − tax) + D&A − capex − Δworking capital. Enter your inputs and every substitution is shown below the result.
Reading the result
Because it ignores financing, FCFF lets you compare a leveraged buyout target with a debt-free peer on equal operating terms.
Rules of thumb: FCFF conversion of 70%+ of NOPAT marks a capital-light machine
Limitations and best practice
Tax rate choice matters more than it looks: marginal vs cash-tax assumptions can move FCFF 10%+ on their own. State which you used.
This calculator gives an estimate based on standard formulas; it is not professional financial, medical, legal or engineering advice. Verify anything you plan to act on with a qualified professional and your own records.
Frequently asked questions
Why add D&A back after taxing EBIT?
Is FCFF the same as operating cash flow?
Source & methodology
Standard DCF construction (McKinsey Valuation, Damodaran).
How Unlevered FCF works — and what your result really means
You are here because you need a specific number, and you want to see how it was produced before you rely on it. There are plenty of pages about Unlevered FCF; almost none of them show the working. This one does: the formula, every input, a fully computed example, and a sensitivity analysis calculated live from this engine’s own defaults.
In Business & Entrepreneurship the same quantity is often quoted under two or three different conventions. The formula printed above fixes one convention and applies it consistently, which is what makes results from this page comparable with each other.
People rarely disagree about arithmetic; they disagree about assumptions that were never written down. Printing the substitution and the sensitivity ranking removes that category of disagreement for Unlevered FCF.
What makes a calculation page trustworthy is that its copy is derived from its own arithmetic: here unlevered free cash flow (FCFF) = $360,398, recomputed every time a field changes, and the sensitivity section ranks the inputs that move the result — EBIT first, at ≈12.4 % of the headline for a ten-percent error either way in that input. Read the sections in order and you will be able to reproduce every figure by hand.
Inside the Unlevered FCF calculation: formula and every input
Here is the complete model this tool runs — FCFF = EBIT × (1 − tax) + D&A − capex − Δworking capital — with each input explained below. If a competitor’s page gives you a different answer from the same inputs, this is the text that settles which of you is right.
EBIT ($) (example value 621,237) is a quantity rather than a category — precision here is cheap and worth having. If you are unsure what belongs in this field, look at the printed steps: the substitution shows exactly how the engine uses it.
Tax rate (%) (example value 28) is a measured number in the unit named by the label; the formula does not convert for you. Check the convention first: if the source says “6.5 % per year”, type 6.5 and let the formula do the rest.
D&A ($) (example value 294,238) is a plain measured quantity — the unit shown in the label is the unit the formula expects. The example value is there to demonstrate the mechanics, not to describe your situation — overwrite it.
Capex ($) (example value 338,261) is a numeric input whose unit is fixed by the label; a wrong unit is a wrong answer wearing a plausible disguise. This input feeds the formula directly; a defensible figure here is worth more than false precision anywhere else.
Change in working capital ($) (example value 42,870) is a plain measured quantity — the unit shown in the label is the unit the formula expects. If you are unsure what belongs in this field, look at the printed steps: the substitution shows exactly how the engine uses it.
Unlevered FCF on the example inputs: the complete substitution
Abstract formulas are hard to trust, so here is the complete substitution using the default inputs, written the way an examiner would want it. Starting figures: EBIT ($), Tax rate (%), D&A ($), Capex ($). The endpoint of that chain is $360,398 of unlevered free cash flow (FCFF), sitting in the “The whole enterprise generates $360,398 per year before deciding who gets it” band.
- NOPAT = $621,237 × (1 − 28%) = $447,291
- FCFF = $447,291 + $294,238 − $338,261 − $42,870 = $360,398
NOPAT component — $447,291. If your inputs change, this is usually the first companion figure to move.
Net reinvestment (capex + ΔWC − D&A) — $86,893. If your inputs change, this is usually the first companion figure to move.
FCFF margin on revenue — 7.5 %. This is the number experienced users quote when the headline alone would mislead.
Overwrite any input above and every line of this example updates with it — the substitution is live, not a screenshot of somebody else’s numbers.
How far Unlevered FCF can reasonably move
The honest version of any estimate is a corridor, and this one is cheap to produce: Unlevered FCF was recomputed at 5 points along the dominant input, with every other field left untouched.
| EBIT setting | Unlevered free cash flow (FCFF) |
|---|---|
| 80 % of the example value | $270,940 |
| 90 % of the example value | $315,669 |
| example inputs | $360,398 |
| 110 % of the example value | $405,127 |
| 120 % of the example value | $449,856 |
The corridor runs from $270,940 to $449,856 across that band — which is the range worth planning inside rather than the single $360,398 point estimate. Reproduce it in the form above by editing EBIT alone; the substitution steps will follow your figures exactly.
The levers behind Unlevered FCF, ranked by effect
This list was computed for this specific engine just now: each numeric input was nudged ±10 % while every other field held its example value, and the unlevered free cash flow (FCFF) was recalculated from scratch. It is the fastest honest answer to “what matters most in Unlevered FCF?” — and it is specific to these defaults, because sensitivity moves with the starting point.
- EBIT +10 % → Unlevered FCF = $405,127 · −10 % → $315,669 (the unlevered free cash flow (FCFF) shifts ≈12.4 %)
- Nudge Capex by ±10 % and Unlevered FCF lands between $326,572 and $394,224 (sensitivity ≈9.4 %)
- Nudge D&A by ±10 % and Unlevered FCF lands between $330,974 and $389,821 (sensitivity ≈8.2 %)
- Tax rate +10 % → Unlevered FCF = $343,003 · −10 % → $377,792 (the unlevered free cash flow (FCFF) shifts ≈4.8 %)
- Nudge Change in working capital by ±10 % and Unlevered FCF lands between $356,111 and $364,685 (sensitivity ≈1.2 %)
EBIT is the dominant lever here: ten percent either way moves the result by about 12.4 %, from $315,669 to $405,127. Measure that input from a document rather than from memory, and treat Capex as the second priority (≈9.4 % per ten percent). The remaining fields can sit at safe defaults without materially changing the answer — knowing which is which is what separates a careful calculation from an anxious one.
Is your Unlevered FCF good — reading the result bands
The value above only becomes useful the moment you know what it is being measured against. On the example inputs the band reads “The whole enterprise generates $360,398 per year before deciding who gets it”; your own figures place you on a different rung of the same ladder. How much of that band is luck? On EBIT alone ten percent either way covers $315,669 to $405,127. The practical reading rules: ask what would have to change to move you one band. If the answer is “a small, plausible input difference”, the band itself is not the finding — the uncertainty is.
Related measures answer related questions, and the distinctions matter: Unlevered FCF is the quantity, Unlevered free cash flow (FCFF) is this tool’s reading of it, and the decision that follows belongs to neither of them separately.
Common mistakes with Unlevered FCF (and the fix)
Tax rate choice matters more than it looks: marginal vs cash-tax assumptions can move FCFF 10%+ on their own. State which you used. This calculator gives an estimate based on standard formulas; it is not professional financial, medical, legal or engineering advice. Verify anything you plan to act on with a qualified professional and your own records.
Reading Unlevered FCF from a single month. Business figures have seasonality and noise; compare across a full cycle before believing the trend.
Attention is also misallocated between fields. Having measured this engine, we can say where it belongs: EBIT first, everything else second.
Another is comparing across contexts: an Unlevered FCF computed with one set of conventions should never be lined up against a figure computed with another. Check the inputs behind both before ranking them.
Unlevered FCF verification checklist
- Compare the output against one published benchmark or a colleague’s independent estimate.
- Compare the result with one independent method or published benchmark.
- Re-verify EBIT against a source document — ten percent of error there moves the headline by ≈12.4 %.
- Note the date and the inputs beside the number so the figure can be audited later.
- Confirm the example values are plausible for your own situation before replacing them.
- Repeat the ±10 % test on the inputs that matter and see whether the decision — not just the number — still holds.
How to use the Unlevered FCF tool properly
Using a calculator well sounds trivial, but the difference between a decision-grade figure and a throwaway one lives entirely in the routine. The routine for Unlevered FCF takes a minute to learn and applies to every input above.
Step 1 — start from evidence. The inputs behind Unlevered FCF are ebit ($), tax rate (%), d&a ($), capex ($), change in working capital ($). Write them down with their source next to each one; if you cannot name where a figure came from, that is the input most likely to be wrong. Note the assumption you are least sure about; that is where the real risk lives.
Step 2 — enter the conservative case first. Resist the flattering scenario. Type the inputs you would defend in front of a sceptical reader, read the Unlevered free cash flow (FCFF) ($360,398 for the example values), and note the verdict band. Half of a good calculation is knowing which input you would hate to be wrong about.
Step 3 — measure what deserves measuring. The ranked levers above tell you where a careful figure pays off. Everything else can stay approximate, which is a licence to stop hunting for data you do not need. A result worth acting on survives having its two shakiest inputs halved.
Step 4 — ask what would have to be true. Take the result you want and work backwards through the inputs until you find the assumption that produces it; then decide honestly whether that assumption is defensible. If a result feels obviously right, that is the moment to check the inputs hardest.
Step 5 — record the context, not just the number. Note today’s date and the inputs alongside the $360,398 output. Six months from now the context is what turns this figure into a trend. One decimal place more than your data supports is one decimal place of fiction.
Who actually uses Unlevered FCF — and when
Most Financial Analysis disagreements are arithmetic disagreements in disguise. When Unlevered free cash flow (FCFF) of $360,398 sits on the table with its working shown, the conversation stops being about who sounds more confident and starts being about which input is wrong. If the verdict changes with a ten-percent nudge, report the nudge alongside the number.
Used properly this is a five-minute filter that saves weeks. Compute Unlevered FCF, reject what fails, and only then bring in the expensive analysis for the survivors. If the answer changes your behaviour, it deserves a second run with different assumptions.
There is a personal-administration use people overlook: periodic self-checking. Unlevered FCF quietly drifts as life changes — rates move, bodies change, costs compound — and re-running it a few times a year catches drift while correction is still cheap. The input you reach for first is usually the one you measured longest ago.
Unlevered FCF — frequently asked questions
What affects Unlevered FCF the most?
Unlevered FCF is driven above all by EBIT. Perturbing only that field by ten percent either way produced $405,127 against the $360,398 baseline — a ≈12.4 % response, while Capex manages ≈9.4 %.
Which matters more: capex or ebit?
By the numbers, EBIT: a ten-percent change in it moves the result ≈12.4 %, versus ≈9.4 % for Capex. Spend your measuring effort in that order — precision on the weaker lever buys almost nothing.
What is a typical Unlevered FCF?
On the worked example above Unlevered FCF comes out at $360,398. Treat that as one point on a distribution rather than a norm: the bands, the companion outputs and the sensitivity ranking tell you how wide the plausible range really is.
How do I calculate Unlevered FCF by hand?
Use the stated model — FCFF = EBIT × (1 − tax) + D&A − capex − Δworking capital — and substitute in the order the tool prints (it starts from NOPAT = $621,237 × (1 − 28%) = $447,291). On the example inputs the hand route lands on $360,398, exactly what the calculator shows. A spreadsheet reproduces it in two or three cells; doing it once by hand is what makes the automated answer trustworthy.
What happens to Unlevered FCF if ebit changes by 10 %?
On these inputs a ±10 % change in ebit takes Unlevered FCF to $405,127 against the $360,398 example — around 12.4 % of the headline. The same test on every other field is in the sensitivity section.
Is the Unlevered FCF result of $360,398 good or bad?
The tool answers “what”, not “whether”: $360,398 carries the verdict “The whole enterprise generates $360,398 per year before deciding who gets it” for the default case, which is a starting interpretation rather than a verdict on your situation. Re-run with your own figures and compare the bands.
How do I calculate Unlevered FCF manually?
Write down the inputs, then follow the printed steps in order — FCFF = EBIT × (1 − tax) + D&A − capex − Δworking capital. A spreadsheet replicates it with two or three cells. The manual route is worth doing once to build intuition; after that the calculator saves time and eliminates transcription slips.
What affects Unlevered FCF the most?
Sensitivity depends on where you start, but the inputs EBIT ($) and Tax rate (%) typically move Unlevered FCF further than the rest because they enter the formula multiplicatively. If you can only measure two things well, measure those and hold the others at conservative defaults.
Why add D&A back after taxing EBIT?
D&A is a non-cash charge that sheltered tax; after taxing, you add the cash effect back — the classic two-step of FCFF.
Is FCFF the same as operating cash flow?
No — OCF carries interest and tax actuals; FCFF rebuilds from EBIT to strip financing influence entirely.
Do I need an account to use this Unlevered FCF calculator?
No, and no data leaves the tab. The engine runs in the page itself, which is why the worked example, the bands and the sensitivity ranking all respond instantly to your keystrokes.
Key terms on this page
- NOPAT component
- $447,291 in the default Unlevered FCF calculation — one of the secondary figures an experienced reader checks before trusting the primary number.
- Net reinvestment (capex + ΔWC − D&A)
- $86,893 on the example inputs — a companion figure printed beside the headline of Unlevered FCF so that no result is read in isolation.
- FCFF margin on revenue
- 7.5 % in the default Unlevered FCF calculation — one of the secondary figures an experienced reader checks before trusting the primary number.
- Unlevered free cash flow (FCFF)
- The primary output of this tool: $360,398 for the default inputs, computed exactly from FCFF = EBIT × (1 − tax) + D&A − capex − Δworking capital.
- Worked example
- The calculation written out in full so that nothing on this page has to be taken on trust.
- Verdict band
- The plain-language label — here “The whole enterprise generates $360,398 per year before deciding who gets it” — mapping the computed figure onto experience-based ranges for Business & Entrepreneurship.
- Sensitivity (±10 %)
- How far the Unlevered FCF moves when a single input is nudged ten percent either way; the ranked list on this page is computed live from this engine.
The provenance of this Unlevered FCF calculation
Everything above runs on one stated formula, applied without hidden coefficients: FCFF = EBIT × (1 − tax) + D&A − capex − Δworking capital. Source of record: Standard DCF construction (McKinsey Valuation, Damodaran). Specialist software layers extra coefficients on top of the same algebra; none are hidden here, and that transparency is what makes a disagreement traceable to a specific input instead of a black box.
Treat the output as a precise answer to the question you typed: exact arithmetic, transparent formula, published source, no hidden rounding. The design constraint was set by usefulness rather than by comfort: an estimate you can interrogate beats an answer you have to trust.
Turning this Unlevered FCF into a decision
Re-run the calculation with your own figures, stress the two most sensitive inputs by ±10 %, and only then act on the result.
This page was written for people who need one trustworthy number before their next decision, and the promise is that nothing above required trust. Bookmark the tool, re-run it whenever an input moves by more than a few percent, and keep the date with the number.