Free Cash Flow

The Free Cash Flow calculator computes the difference between the net cash generated during a period and the cash spent on investments and capital expenditures.

INSTRUCTIONS: Choose your preferred currency units and enter the following:

• (NC)  This is the Net Cash generated during the current period.
• (CS) This is the Cash Spent on investments and capital expenditures (improvements) in the current period.

Free Cash Flow: The calculator returns the amount of free cash flow in U.S. dollars.  However, this can be automatically converted to other currencies (e.g. the Euro) via the pull-down menu.  The exchange rates are updated several times per hour.

This equation shows how to compute free cash flow. Free cash flow is the net change in cash generated by the operations of a business during a reporting period, minus cash outlays for working capital, capital expenditures, and dividends during the same period. This is a strong indicator of the ability of an entity to remain in business.

Resource:

• Dopson, Lea R., and David K. Hayes. Managerial Accounting for the Hospitality Industry. Hoboken, NJ: Wiley, 2009. Print.
• Bragg, Steven. "What Is Free Cash flow? - Questions & Answers - AccountingTools." What Is Free Cash flow? - Questions & Answers - AccountingTools. AccountingTools, 23 July 2011. Web. 03 Aug. 2015.