FCFE (Free Cash Flow to Equity)
- Created by
- Renato Passos, Eng. de Software
- Reviewed by
- Renato Passos, Eng. de Software
Last updated: Apr 18, 2026
Formula
FCFE
About this calculator
The FCFE (Free Cash Flow to Equity) calculator is a useful tool for evaluating a company's financial health. It calculates the free cash flow available to shareholders, considering the operating cash flow, capital expenditures, and interest paid.
The formula used by the calculator is FCFF − Interest(1−T) + New debt, where FCFF is the free cash flow to the firm, Interest is the value of interest paid, T is the tax rate, and New debt is the increase or decrease in the company's debt.
It is essential to use this calculator in real-world scenarios, such as when evaluating a company's financial health before investing or when planning a company's financial strategy. Additionally, it is crucial to be careful when entering values, as small errors can lead to significantly different results.
The FCFE calculator can be used in conjunction with other financial analysis tools to gain a more comprehensive understanding of a company's financial health. It is vital to understand that the free cash flow available to shareholders is an important indicator of a company's ability to generate profits and distribute them to shareholders.
Frequently asked questions
What is FCFE?
FCFE stands for Free Cash Flow to Equity. It is a financial indicator that measures the amount of money available to shareholders after deducting operating expenses, interest, and taxes.
How to calculate FCFE?
FCFE is calculated using the formula FCFF − Interest(1−T) + New debt. It is essential to have the correct values to obtain an accurate result.
When to use the FCFE calculator?
The FCFE calculator is useful when evaluating a company's financial health, planning a financial strategy, or investing in stocks.
What is FCFF?
FCFF stands for Free Cash Flow to the Firm. It is a financial indicator that measures the amount of money available to the company after deducting operating expenses and interest.
Why is FCFE important?
FCFE is important because it indicates a company's ability to generate profits and distribute them to shareholders. Additionally, it is a useful indicator for evaluating a company's financial health.