Cash Flow Reconciliation Template

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Cash Flow Reconciliation Template

This cash flow reconciliation template will help you differentiate between EBITDA, CF, FCF, and FCFF.

Below is a preview of the cash flow reconciliation template:

Cash Flow Reconciliation Template Screenshot

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EBITDA vs. Cash Flow vs. Free Cash Flow vs. Unlevered Free Cash Flow

There are major differences between EBITDACash FlowFree Cash Flow, and Free Cash Flow to Firm.

#1 EBITDA

EBITDA can be easily calculated off the income statement by adding to the net income the taxes, interest, depreciation & amortization.

#2 Cash Flow (from Operations, levered)

Operating Cash Flow is a measure of cash generated by a business from its normal operating activities. Like EBITDA, depreciation and amortization are added back to cash from operations.  However, all other non-cash items like stock-based compensation, unrealized gains/losses, or write-downs are also added back.

Unlike EBITDA, cash from operations includes changes in net working capital items like accounts receivable, accounts payable, and inventory.

Operating cash flow does not include capital expenditures.

#3 Free Cash Flow (FCF)

Free Cash Flow, also referred to as “Levered Free Cash Flow” or “Cash Flow to Equity”, can be easily derived from the statement of cash flows by taking operating cash flow and deducting capital expenditures.

FCF is the amount of cash flow available for discretionary spending by management/shareholders.

#4 Free Cash Flow to the Firm (FCFF)

Free Cash Flow to the Firm (also called Unlevered Free Cash Flow) requires a multi-step calculation and is used in Discounted Cash Flow analysis to arrive at the Enterprise Value. It is calculated based on the assumption that the firm was to have no debt.

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Analyst Certification FMVA® Program

Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.

 

Financial Analyst certification curriculum

 

A well rounded financial analyst possesses all of the above skills!

 

Additional Questions & Answers

CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.

In order to become a great financial analyst, here are some more questions and answers for you to discover:

 

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