Savvy business owners know how to calculate cash flow. This same concept can help you manage your personal budget. Cash flow can be divided into two categories: free cash flow and operating cash flow.

Free cash flow (FCF) is the amount of money a company has that exceeds the amount needed to sustain and grow the business.

Present value = $75 ÷ 1.21 Present value = $61.98 Thus, the second-year free cash flow of $75 is equivalent to having $61.98 in hand today, assuming we can earn a 10% return on our money.

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The free cash flow (FCF) formula calculates the amount of cash left after a company pays operating expenses and capital expenditures. Learn how to calculate it.

How to Calculate Free Cash Flow. The free cash flow of a small business determines how much cash the company has left over at the end of the year after accounting for its expenses.

Present value = $75 ÷ 1.21 Present value = $61.98 Thus, the second year free cash flow of $75 is equivalent to having $61.98 in our hands today, assuming we can earn a 10% return on our money.

At the same time, the total value of all its shares was about $2.6 trillion, giving it a free cash flow yield of 4.27%. The 4.27% free cash flow yield shows that Apple generated a solid amount of ...