Generalized Free Cash Flow for the Firm (FCFF) Excel Model

A generalised FCFF (Free Cash Flow for the Firm) Excel model, where the operating margins are allowed to change each year; best suited for firms in transition.

Inputs needed:

1. Length of high growth period

2. Expected growth rate in earnings during the high growth period.

3. Capital Spending, Depreciation and Working Capital needs during the high growth period.

4. Expected growth rate in earnings during the stable growth period.

5. Inputs for the cost of capital. (Cost of equity, Cost of debt, Weights on debt and equity)

- Prof. Aswath Damodaran

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