![]() To start, you’ll need your company Income Statement or Balance Sheet to pull key financial numbers.įirst, let’s get some important financial terms straight. How to calculate free cash flowĬalculating your business’s free cash flow is actually easier than you might think. While a traditional cash flow statement (like the kind you can get from Wave reports) gives you a picture of your business’s cash at a given time, that doesn’t always help with planning and budgeting-because it doesn’t truly reflect the cash you have available, or free to use.Ĭan you afford to invest in that new software? Do you have enough cash on hand to pay for that virtual assistant when their invoice comes due? How much cash do you have free to spend on thank you cards for your clients?Ĭalculating the cash you have available to spend (via the FCF formula) helps answer those questions and others like them. ![]() One of the most common and important cash flow formulas is free cash flow (or FCF). Use our free cash flow calculator to follow along. Don’t freak out if they look complicated! We’ll go over definitions, calculations, and examples together. The three cash flow formulas above each have their own benefits and tell you different things about your business.
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