# FCFE Calculator – Free Cash Flow to Equity

URL: https://speedycalculator.com/calculators/finance/fcfe/
Last updated: 2026-10-25

> The FCFE calculator works out free cash flow to equity – the cash available to shareholders after operating expenses, reinvestment and net borrowing – from net income or from operating cash flow.

## Inputs

- Net income
- Depreciation and amortization
- Capital expenditure
- Increase in working capital
- Net borrowing (new debt − repayments)

## Results

- Free cash flow to equity

## Formula

```
FCFE = net income + D&A − capex − change in working capital + net borrowing
or FCFE = operating cash flow − capex + net borrowing
```

## Explanation

FCFE is the basis of equity valuation models. A company that borrows to fund dividends can show high FCFE temporarily, so look at several years.

### How to use the FCFE Calculator – Free Cash Flow to Equity

- **Net income**
- **Depreciation and amortization**
- **Capital expenditure**
- **Increase in working capital**
- **Net borrowing (new debt − repayments)**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter net income, depreciation and amortization, capital expenditure, the change in working capital and net borrowing.

### Tips

- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.

### Common mistakes to avoid

- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.

### Inputs explained

FieldWhat to enterNet incomeAmount in your currencyDepreciation and amortizationAmount in your currencyCapital expenditureAmount in your currencyIncrease in working capitalAmount in your currencyNet borrowing (new debt − repayments)Amount in your currency

### Example values

How the main result changes when **Net income** changes and everything else stays at the example values above:

Net incomeFree cash flow to equity200,000150,000300,000250,000400,000350,000500,000450,000600,000550,000800,000750,000

## Worked example

Inputs — Net income: $400,000; Depreciation and amortization: $150,000; Capital expenditure: $220,000; Increase in working capital: $30,000; Net borrowing (new debt − repayments): $50,000.

Results — **Free cash flow to equity = $350,000.00**.

## FAQ

**What is FCFE?**
Cash available to shareholders after reinvestment and debt flows.

**How is FCFE different from FCFF?**
FCFF is before debt payments; FCFE is after.

**What is FCFE used for?**
Valuing equity with a discounted cash flow model.

**What formula does the FCFE Calculator – Free Cash Flow to Equity use?**
FCFE = net income + D&A − capex − change in working capital + net borrowing.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)