What is the difference between EBITDA and FCF?

But because FCF accounts for the cash spent on new equipment in the current year, the company will report $200,000 FCF ($1,000,000 EBITDA - $800,000 equipment) on $1,000,000 of EBITDA that year. If we assume that everything else remains the same and there are no further equipment purchases, EBITDA and FCF will be equal again the following year.

What is the difference between free cash flow and EBITDA?

Both free cash flow (FCF) and earnings before interest, tax, depreciation, and amortization (EBITDA) are methods for examining the earnings a business generates. Each method has its pros and cons as a measure, but EBITDA may be more useful when comparing the performance of different companies.

How much free cash flows to equity is FCFF?

FCFF = $15.32 million. Note that the free cash flows available to the common stockholders are less than those accessible before paying the debtors. 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.