Free Cash Flow to the Firm

Free cash flow to the firm, abbreviated as FCFF, is the available cash flow for investors.

 

free cash flow to the firm Formulas

\(\large{ FCFF =  OCF + IE  \; \left( 1 -  TR  \right)  - CapEx }\)
\(\large{ FCFF =  NI + NCC + IE  \; \left( 1 -  TR  \right) - WC_i - CapEx }\)

Where:

\(\large{ FCFF }\) = free cash flow to the firm

\(\large{ OCF }\) = operating cash flow

\(\large{ CapEx }\) = capitol expenditures

\(\large{ IE }\) = interest expense

\(\large{ NW_i }\) = investment in working capital

\(\large{ NI }\) = net income

\(\large{ NCC }\) = non-cash charges

\(\large{ TR }\) = tax rate