Free Cash Flow from EBITDA Excel Template

Prepared by Dheeraj Vaidya, CFA, FRM

dheeraj@wallstreetmojo.com

visit - www.wallstreetmojo.com
Consider a tea company with $400,000 in depreciation and amortization and EBITDA of $20 million. It has $3 million in n
and pays $200,000 as interest expense. The capital expenditure for the year is$80,000. Also, consider $400,000 to be the
its net working capital. What are its free cash flows to equity if a tax rate of 25% is applicable?

Items Value (figures

in $)
EBITDA 20,000,000
D&A 400,000
Interest 200,000
Tax rate 25%
Changes in working capital 400,000
Capital expenditure 80,000
Net borrowings 3,000,000

FCFE 12,270,000
FCFF 15,320,000

Note: Free cash flows to the firm represent the claim of debtors and shareholders after all expenses and
other hand, free cash flows to equity assume that debtors have already been paid off.
 ITDA of $20 million. It has $3 million in net debts
80,000. Also, consider $400,000 to be the change in
% is applicable?

shareholders after all expenses and taxes have been paid. On the
dy been paid off.
Jim, an analyst in a sports apparel producing company, wants to calculate free cash flows to
equity from the company’s financial statements, an excerpt of which is provided here. Also,
comment on the performance of the company visible from the required calculations.

Particulars Value ($)

EBITDA 120,000,000
D&A 1,100,000
Interest 800,000
Taxes 34,500,000
Changes in working capital 65,000
Net borrowings 10,000,000
Capital expenditure 15,500,000

FCFE 79,265,000
FCFF 69,825,000
Can you calculate the free cash flows to firm and equity from the information provided below?

Particulars Value
EBITDA $100
Interest $5
Tax rate 25%
Changes in net working capital $15
Capex $20

FCFF $70.00
FCFE $66.25