Unlock accurate stock valuation with our FCFE Calculator. Quickly determine the Free Cash Flow to Equity of a company, a vital metric for investors. Understand how net income, capital expenditures, and working capital impact a firm's cash available to equity holders. Make informed investment decisions with ease!
Formula:
The Free Cash Flow to Equity (FCFE) formula is:
FCFE = Net Income + Depreciation & Amortization - Capital Expenditures - Change in Non-Cash Working Capital + Net Borrowing
- Net Income (NI): The company's profit after all expenses, interest, and taxes.
- Depreciation & Amortization (D&A): Non-cash expenses added back as they don't involve cash outflow.
- Capital Expenditures (CAPEX): Funds used by a company to acquire or upgrade physical assets.
- Change in Non-Cash Working Capital (ΔNCWC): Change in current assets minus current liabilities (excluding cash and debt). A positive value means cash is tied up, a negative value means cash is freed up.
- Net Borrowing (NB): The net increase or decrease in a company's outstanding debt. An increase in debt is added, a decrease is subtracted.