{
  "id": "unlevered-free-cash-flow",
  "version": "f3a1c41e5558",
  "status": "published",
  "name": "Unlevered Free Cash Flow Calculator",
  "question": "What is my unlevered free cash flow?",
  "summary": "Computes unlevered free cash flow (free cash flow to the firm): EBIT after tax, plus depreciation and amortization, minus capital expenditures and the increase in net working capital.",
  "category": "finance",
  "subcategory": "investing",
  "url": "https://www.acalculator.org/finance/unlevered-free-cash-flow-calculator",
  "markdown": "https://www.acalculator.org/finance/unlevered-free-cash-flow-calculator.md",
  "kind": "function",
  "method": "NOPAT = EBIT × (1 − tax rate ÷ 100). Net capital expenditures = capital expenditures − depreciation and amortization. Reinvestment = net capital expenditures + increase in net working capital. Unlevered free cash flow = NOPAT − reinvestment.",
  "assumptions": [
    "Tax is charged on all of operating income, as if the business had no debt; an operating loss is taxed at the same rate (it saves tax).",
    "The cash flow is before interest and debt repayments, so it belongs to lenders and owners together.",
    "Arithmetic is exact on the typed decimals; money shows to the cent, halves up."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "ebit": {
        "title": "Operating income (EBIT)",
        "description": "Earnings before interest and taxes for the year. Negative for an operating loss.",
        "type": "number",
        "x-unit": "USD",
        "minimum": -1000000000000000,
        "maximum": 1000000000000000
      },
      "tax": {
        "title": "Tax rate",
        "description": "The income tax rate on operating income, for example the marginal or effective rate.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 100
      },
      "da": {
        "title": "Depreciation and amortization",
        "description": "The year’s depreciation and amortization, non-cash costs already taken off EBIT.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "capex": {
        "title": "Capital expenditures",
        "description": "Cash spent on property, plant, equipment and other long-term assets in the year.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "nwc": {
        "title": "Increase in net working capital",
        "description": "How much non-cash working capital (inventory and receivables minus payables) grew in the year. Negative when it shrank.",
        "type": "number",
        "x-unit": "USD",
        "minimum": -1000000000000000,
        "maximum": 1000000000000000
      }
    }
  },
  "outputs": {
    "ufcf": {
      "label": "Unlevered free cash flow",
      "description": "NOPAT + depreciation and amortization − capital expenditures − increase in net working capital.",
      "format": "money"
    },
    "nopat": {
      "label": "NOPAT (EBIT after tax)",
      "description": "EBIT × (1 − tax rate).",
      "format": "money"
    },
    "netCapex": {
      "label": "Net capital expenditures",
      "description": "Capital expenditures − depreciation and amortization.",
      "format": "money"
    },
    "reinvestment": {
      "label": "Reinvestment",
      "description": "Net capital expenditures + increase in net working capital.",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "ebit": 1000000,
      "tax": 25,
      "da": 200000,
      "capex": 300000,
      "nwc": 50000
    },
    "outputs": {
      "ufcf": 600000,
      "nopat": 750000,
      "netCapex": 100000,
      "reinvestment": 150000
    },
    "text": "Operating income of $1,000,000.00 taxed at 25% leaves NOPAT of $750,000.00; after reinvestment of $150,000.00, unlevered free cash flow is $600,000.00."
  },
  "examples": [
    {
      "given": {
        "ebit": 1000000,
        "tax": 25,
        "da": 200000,
        "capex": 300000,
        "nwc": 50000
      },
      "expect": {
        "ufcf": 600000,
        "nopat": 750000,
        "netCapex": 100000,
        "reinvestment": 150000
      },
      "source": "Aswath Damodaran, NYU Stern, Variables used in Data Set (FCFF = EBIT (1 − t) − (capital expenditures − depreciation) − change in non-cash working capital). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm; The Little Book of Valuation, Estimating Cashflows (free cash flow to the firm = after-tax operating income − reinvestment, before interest and principal payments). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/littlebook/cashflows.htm; hand calculation in content.mdx: 1,000,000 × 0.75 = 750,000; 750,000 + 200,000 − 300,000 − 50,000 = 600,000"
    },
    {
      "given": {
        "ebit": 500000,
        "tax": 21,
        "da": 80000,
        "capex": 60000,
        "nwc": -25000
      },
      "expect": {
        "ufcf": 440000,
        "nopat": 395000,
        "netCapex": -20000,
        "reinvestment": -45000
      },
      "source": "Aswath Damodaran, NYU Stern, Variables used in Data Set (FCFF = EBIT (1 − t) − (capital expenditures − depreciation) − change in non-cash working capital). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm; The Little Book of Valuation, Estimating Cashflows (free cash flow to the firm = after-tax operating income − reinvestment, before interest and principal payments). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/littlebook/cashflows.htm; hand calculation in content.mdx: 500,000 × 0.79 = 395,000; 395,000 + 80,000 − 60,000 + 25,000 = 440,000"
    },
    {
      "given": {
        "ebit": -200000,
        "tax": 25,
        "da": 120000,
        "capex": 250000,
        "nwc": 10000
      },
      "expect": {
        "ufcf": -290000,
        "nopat": -150000,
        "reinvestment": 140000
      },
      "source": "Aswath Damodaran, NYU Stern, Variables used in Data Set (FCFF = EBIT (1 − t) − (capital expenditures − depreciation) − change in non-cash working capital). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm; The Little Book of Valuation, Estimating Cashflows (free cash flow to the firm = after-tax operating income − reinvestment, before interest and principal payments). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/littlebook/cashflows.htm; hand calculation in content.mdx: −200,000 × 0.75 = −150,000; −150,000 + 120,000 − 250,000 − 10,000 = −290,000"
    },
    {
      "given": {
        "ebit": 1234567.89,
        "tax": 26.5,
        "da": 98765.43,
        "capex": 150000,
        "nwc": 12345.67
      },
      "expect": {
        "ufcf": 843827.15915,
        "nopat": 907407.39915,
        "netCapex": 51234.57,
        "reinvestment": 63580.24
      },
      "source": "Aswath Damodaran, NYU Stern, Variables used in Data Set (FCFF = EBIT (1 − t) − (capital expenditures − depreciation) − change in non-cash working capital). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm; The Little Book of Valuation, Estimating Cashflows (free cash flow to the firm = after-tax operating income − reinvestment, before interest and principal payments). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/littlebook/cashflows.htm; hand calculation in content.mdx: 1,234,567.89 × 0.735 = 907,407.39915; 907,407.39915 + 98,765.43 − 150,000 − 12,345.67 = 843,827.15915 (Python Fraction)"
    }
  ],
  "sources": [
    "Aswath Damodaran, NYU Stern School of Business, Variables used in Data Set: free cash flow to the firm, FCFF = EBIT (1 − t) − (capital expenditures − depreciation) − change in non-cash working capital; net capital expenditures = capital expenditures − depreciation. https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm (retrieved 2026-10-19)",
    "Aswath Damodaran, The Little Book of Valuation, Estimating Cashflows: free cash flow to the firm = after-tax operating income − reinvestment, where reinvestment = capital expenditures − depreciation + change in non-cash working capital; the cash flow to the firm is before interest and principal payments on debt, with operating income taxed as if the whole of it were taxable. https://pages.stern.nyu.edu/~adamodar/New_Home_Page/littlebook/cashflows.htm (retrieved 2026-10-19)",
    "OpenStax, Principles of Finance, 5.6 Operating Cash Flow and Free Cash Flow to the Firm (FCFF): free cash flow is the cash available to repay debt or pay dividends after covering operations and capital assets. https://openstax.org/books/principles-finance/pages/5-6-operating-cash-flow-and-free-cash-flow-to-the-firm-fcff (retrieved 2026-10-19)"
  ],
  "related": [
    "nopat",
    "cash-flow",
    "terminal-value",
    "wacc",
    "capex"
  ],
  "changelog": []
}