Calculating your free cash flow is straightforward once you know the Free Cash Flow formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Free Cash Flow Calculator.
What is Free Cash Flow?
The Free Cash Flow calculation tells you your free cash flow from a few simple inputs. The figure you are solving for here is the free cash flow, expressed in INR.
The Free Cash Flow formula
The core formula is:
Free cash flow = Operating cash flow - Capital expenditureHere is what each input means:
- Operating cash flow — a money amount. Example: ₹1,10,000.
- Capital expenditure — a money amount. Example: ₹30,000.
How to calculate it step by step
- Write down the operating cash flow (for example, ₹1,10,000).
- Write down the capital expenditure (for example, ₹30,000).
- Apply the formula above to get your free cash flow.
- Double-check the result with the Free Cash Flow Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Operating cash flow | ₹1,10,000 |
| Capital expenditure | ₹30,000 |
| Free cash flow | ₹80,000.00 |
With operating cash flow of ₹1,10,000 and capital expenditure of ₹30,000, the free cash flow works out to ₹80,000.00.
Example 2
With operating cash flow of ₹2,20,000 and capital expenditure of ₹30,000, the free cash flow works out to ₹1,90,000.00.
| Result | Value |
|---|---|
| Free cash flow | ₹1,90,000.00 |
Example 3
With operating cash flow of ₹55,000 and capital expenditure of ₹30,000, the free cash flow works out to ₹25,000.00.
| Result | Value |
|---|---|
| Free cash flow | ₹25,000.00 |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
- Annual rates must be converted to the period you are calculating for (for example, divide an annual rate by 12 for a monthly figure).
Prefer not to do the maths by hand? — the Free Cash Flow Calculator does it instantly, for free, with the formula and a worked example built in.
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