Free Cash Flow to Equity (FCFE) Calculator
Calculate Free Cash Flow to Equity (FCFE) accurately with our advanced online tool. Ideal for finance professionals and students.
This value represents the cash available to equity shareholders after all operating expenses, capital investments, and changes in working capital.
How to use
Enter the components of your cash flow statement—net income, non-cash charges such as depreciation, capital expenditures, changes in working capital, and net borrowing—to model how much cash is truly available to equity investors.
Methodology
The calculator aggregates each input using the standard FCFE formula, so you can see the net effect of operating performance, reinvestment, and financing on shareholder cash.
Full original guide (expanded)
Compute free cash flow to equity from net income, capex, working capital changes, and net borrowing.
All calculations are strictly based on standard financial formulas and data sources such as financial statements and market analysis data.
The Formula Explained
FCFE = Net Income + Depreciation - Capital Expenditure - Change in Working Capital + Net Borrowing
Glossary of Terms
- Net Income: Total revenue minus total expenses, interest, and taxes.
- Depreciation: The reduction in the value of an asset over time.
- Capital Expenditure (CapEx): Funds used by a company to acquire or upgrade physical assets.
- Change in Working Capital: The difference in the working capital from one period to the next.
- Net Borrowing: The total amount of new borrowing minus the repayments of old borrowings.
Frequently Asked Questions (FAQ)
What is Free Cash Flow to Equity (FCFE)?
FCFE is the amount of cash a company can return to its shareholders after all expenses, reinvestments, and debt repayments.
Why is FCFE important?
FCFE is important because it provides a measure of how much cash is available to equity investors after all operating expenses and capital investments.
How do you calculate FCFE?
FCFE is calculated using the formula: FCFE = Net Income + Depreciation - Capital Expenditure - Change in Working Capital + Net Borrowing.
What is the difference between FCFE and FCFF?
FCFE measures cash available to equity shareholders, whereas Free Cash Flow to the Firm (FCFF) measures cash available to all stakeholders, including debt holders.
Can FCFE be negative?
Yes, FCFE can be negative, indicating that a company may need additional financing to meet its obligations or invest in growth opportunities.