NFCC = [(Current assets minus current liabilities)

multiplied by (K)] minus the value of all outstanding works

or projects under ongoing contracts, including awarded
contracts yet to be started.

Where:
K = 10 for a contract duration of one year or less, 15 for a
contract duration of more than one year up to two years,
and 20 for a contract duration of more than two years.

Example

Current Assets= P 3,000,000

Current Liabilities= P 500,000

Value of Outstanding Works= P 4,000,000

Contract Duration= 1 year

NFCC =[ (P 3,000,000 – P 500,000) x 10 ] – P 4,000,000

= P 25,000,000 – P 4,000,000
= P 21,000,000