FCFF
Business & Finance abbreviation · Finance
| Stands for | Free cash flow to the firm |
|---|---|
| Categories | Business & Finance |
FCFF stands for Free cash flow to the firm, a finance abbreviation.
Cash flow available to all capital providers, both lenders and shareholders, after operating expenses, taxes, capital expenditure and working-capital investment but before interest payments. It is the cash flow discounted at WACC in an enterprise-value DCF.
Example: Discounting projected FCFF at 8 percent gives an enterprise value of $2.4 billion before netting off debt.
Usage notes
A common formula is EBIT times one minus the tax rate, plus depreciation and amortization, minus capex, minus the increase in net working capital. Also called unlevered free cash flow (UFCF). Equity value is then derived by subtracting net debt from the resulting enterprise value.
Related abbreviations
More finance abbreviations
- ESOP – Employee stock ownership plan
- EV – Enterprise value
- EV/EBITDA – Enterprise value to EBITDA
- EVA – Economic value added
- FCF – Free cash flow
- FCFE – Free cash flow to equity
- FICC – Fixed income, currencies and commodities
- FP&A – Financial planning and analysis
- FV – Future value
- GP – General partner
- HNWI – High-net-worth individual
- HoldCo – Holding company