Free cash flow to equity calculator
Net income of 100,000, plus 25,000 of depreciation, minus 40,000 of capex and an 8,000 rise in working capital, plus 10,000 of net borrowing, leaves FCFE of 87,000 for shareholders. Free in your browser.
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Run — free
Worked example
- Net income
- 100,000
- Depreciation
- 25,000
- Capital expenditure
- 40,000
- Change in working capital
- 8,000
- Net borrowing
- 10,000
- Fcfe
- 87,000
Free cash flow to equity, almost always abbreviated FCFE in equity valuation, is the cash a firm could distribute to common shareholders after funding operations, reinvestment, and net debt principal. A positive figure is cash available to equity; a negative figure is a cash shortfall that equity must fund.
What free cash flow to equity means and how the identity is formed
Free cash flow to equity is the residual cash claim of common shareholders after the firm has covered operating costs and taxes already reflected in net income, reinvested in fixed capital and working capital, and after the cash effects of issuing or retiring interest-bearing debt. Equity-valuation models discount this stream, not accounting earnings, because only cash that could leave the firm as dividends or share repurchases is available to the residual owners.
The standard identity used in the CFA curriculum and in Damodaran-style residual-cash models is FCFE equals net income plus non-cash charges, principally depreciation and amortization, minus capital expenditure, minus the increase in non-cash working capital, plus net borrowing. Net borrowing is new interest-bearing principal issued minus principal repaid in the same period; a firm that issues more than it retires supplies cash that equity holders do not have to contribute, and a firm that retires more than it issues consumes cash that equity must replace.
Depreciation is added back because it reduced net income without using cash in the period. Capital expenditure is subtracted because it is a cash outflow that the income statement does not fully expense in the same year. An increase in working capital is a use of cash and a decrease is a source.
Searchers who type free cash flow to equity calculator want that single residual amount, not free cash flow to the firm, not EBITDA, and not a dividend that management happened to declare. When FCFE is positive, equity could in principle receive that cash; when it is negative, the firm needs a cash injection from owners or a draw on cash balances to fund the gap. The sign of FCFE is therefore a statement about residual cash, not about whether the business is profitable on an accrual basis.
Where a free cash flow to equity calculator earns its keep
Valuation landing pages that rank for free cash flow to equity calculator need a live form that turns five familiar statement lines into the single residual a reader compares across names. Equity-research and corporate-development teams take that residual as the cash they discount in an FCFE model, as a check against a declared dividend plus buyback, and as the story they tell a board when reported earnings are strong but cash available to owners is not.
Courseware and LMS plugins need a deterministic oracle for problem sets that ask students to compute FCFE equals net income plus depreciation minus CapEx minus the change in working capital plus net borrowing, including the loss-making case where net income is negative and the debt-paydown case where net borrowing is negative. Editorial desks contrast FCFE with free cash flow to the firm so a reader can see why levered and unlevered cash are different claims, not substitutes for each other.
Automation authors pin the same amount in notebooks, workflow tools, and edge workers whenever a spreadsheet changes depreciation, capital expenditure, or the borrowing assumption. Failed validation does not consume balance. The capability never invents a depreciation schedule or a working-capital forecast from prices; those estimates belong in your data layer, and this calculator only applies the identity once you supply them.
What you can do with it
Equity DCF and residual-cash models
Turn net income, depreciation, CapEx, the change in working capital, and net borrowing into the FCFE amount an equity DCF discounts at the cost of equity.
Dividend and buyback capacity check
Compare a declared dividend plus repurchase against computed FCFE to see whether the payout is funded by residual cash or by a cash shortfall.
Classroom FCFE homework keys
Mark problems that ask students to compute FCFE = NI + D&A − CapEx − ΔNWC + net borrowing, including losses and debt paydowns, with a deterministic amount.
FAQ
How is free cash flow to equity calculated?
FCFE equals net income plus depreciation minus capital expenditure minus the change in working capital plus net borrowing. Depreciation is added back as a non-cash charge; CapEx and an increase in working capital are uses of cash; net borrowing is a source of cash for equity holders.
How is FCFE different from free cash flow to the firm (FCFF)?
FCFE is the residual cash claim of equity holders after net borrowing. FCFF is cash available to all capital providers before debt principal and after-tax interest. This calculator returns FCFE only; do not use it as a substitute for an unlevered (FCFF) model.
What is the sign convention for CapEx and working capital?
Enter capital expenditure as a positive amount when the firm invests; it is subtracted. Enter the change in working capital as the increase: a positive increase is subtracted as a use of cash, and a decrease (negative) is added as a source of cash. Net borrowing is positive when the firm issues more debt than it repays.
What does a negative FCFE mean?
The firm needs cash from its owners, or from its own cash balance, to cover the gap. It says nothing about accounting profit: a profitable company can still show negative FCFE after heavy investment.
Why is net borrowing added to FCFE?
Because new debt supplies cash that shareholders do not have to put in. Net borrowing is debt issued minus debt repaid, so a period that repays more than it borrows enters a negative figure and lowers FCFE.
Related tools
For developers — API access
Everything on this page is available programmatically. This section is for teams who want to wire it into their own systems; everyone else can just use the tool above.
API endpoint
Prefer to automate it? One authenticated POST creates the task; the result comes back by webhook or a signed link. The same capability also runs here on the web, by email and from Telegram — and soon from our app too.
Call it from your stack
curl -X POST https://api.kit.forhosting.com/fin/free-cash-flow-to-equity \
-H "Authorization: Bearer $KIT_KEY" \
-H "Content-Type: application/json" \
-d '{"net_income":100000,"depreciation":25000,"capital_expenditure":40000,"change_in_working_capital":8000,"net_borrowing":10000}'const res = await fetch("https://api.kit.forhosting.com/fin/free-cash-flow-to-equity", {
method: "POST",
headers: {
"Authorization": `Bearer ${process.env.KIT_KEY}`,
"Content-Type": "application/json"
},
body: JSON.stringify({
"net_income": 100000,
"depreciation": 25000,
"capital_expenditure": 40000,
"change_in_working_capital": 8000,
"net_borrowing": 10000
})
});
const { task_id } = await res.json();import os, requests
res = requests.post(
"https://api.kit.forhosting.com/fin/free-cash-flow-to-equity",
headers={"Authorization": f"Bearer {os.environ['KIT_KEY']}"},
json={
"net_income": 100000,
"depreciation": 25000,
"capital_expenditure": 40000,
"change_in_working_capital": 8000,
"net_borrowing": 10000
},
)
task_id = res.json()["task_id"]<?php
$res = file_get_contents("https://api.kit.forhosting.com/fin/free-cash-flow-to-equity", false, stream_context_create([
"http" => [
"method" => "POST",
"header" => "Authorization: Bearer " . getenv("KIT_KEY") . "\r\nContent-Type: application/json",
"content" => '{"net_income":100000,"depreciation":25000,"capital_expenditure":40000,"change_in_working_capital":8000,"net_borrowing":10000}',
],
]));
$task = json_decode($res, true);body := bytes.NewBufferString(`{"net_income":100000,"depreciation":25000,"capital_expenditure":40000,"change_in_working_capital":8000,"net_borrowing":10000}`)
req, _ := http.NewRequest("POST", "https://api.kit.forhosting.com/fin/free-cash-flow-to-equity", body)
req.Header.Set("Authorization", "Bearer "+os.Getenv("KIT_KEY"))
req.Header.Set("Content-Type", "application/json")
res, _ := http.DefaultClient.Do(req)Example request
{
"net_income": 100000,
"depreciation": 25000,
"capital_expenditure": 40000,
"change_in_working_capital": 8000,
"net_borrowing": 10000
}Example response
{
"task_id": "tsk_a1b2c3d4e5f6a1b2c3d4e5f6",
"type": "fin.free_cash_flow_to_equity",
"status": "queued",
"_links": {
"result": "/tasks/tsk_…/result"
}
}The API is asynchronous: the call returns a task_id immediately and the result arrives by webhook. Polling is capped at 1 req/s per task.
Pricing
Published price — no tokens, no invented credits. A failed task is never charged.
Errors
| HTTP | Code | Meaning |
|---|---|---|
401 | unauthorized | Missing or invalid API key. |
402 | insufficient_balance | Your balance doesn't cover the task price. |
404 | unknown_type | That task type doesn't exist. |
429 | rate_limited | Too many requests. Use the webhook instead of polling. |
Technical notes
This calculator accepts net income, depreciation, capital expenditure, the change in working capital, and net borrowing as finite numbers, applies the identity FCFE equals net income plus depreciation minus capital expenditure minus the change in working capital plus net borrowing, and returns the FCFE amount as a deterministic JSON contract. Any input that is not a finite number fails with invalid_input instead of inventing a cash flow.
What free cash flow to equity means and how the identity is formed
This endpoint applies the identity you supply so homework keys, landing-page widgets, and valuation automation share one auditable FCFE amount. It does not fetch filings, classify line items, or forecast growth; those estimates belong in your data layer.
Input contract, response shape, and error behaviour
On success the body echoes the five inputs, returns fcfe as the rounded residual, and includes a formula string restating the identity. Example: net income of one hundred thousand, depreciation of twenty-five thousand, capital expenditure of forty thousand, a working-capital increase of eight thousand, and net borrowing of ten thousand yields FCFE of eighty-seven thousand. POST a JSON body with five required finite numbers. net_income is period net income attributable to common equity in a single currency unit, with aliases ni, net_profit, profit, and net_earnings; a loss is a negative number and is accepted. depreciation is the period non-cash charge added back, typically depreciation and amortization, with aliases da, dep, depreciation_and_amortization, ncc, non_cash_charges, and amortization. capital_expenditure is cash spent on fixed capital in the same currency and period, entered as a positive amount when the firm invests, with aliases capex, cap_ex, fcinv, and fixed_capital_investment; net proceeds from asset sales can be entered as a negative capital expenditure. change_in_working_capital is the increase in non-cash working capital; a positive value is a use of cash and is subtracted, a negative value is a release of cash and is added, with aliases delta_nwc, nwc_change, wcinv, working_capital_change, change_in_nwc, and delta_working_capital. net_borrowing is debt issued minus debt repaid, with aliases net_debt_issued, net_new_debt, and borrowing; a paydown is negative. Each field may arrive as a JSON number or as a numeric string. Missing, empty, boolean, NaN, or infinite values fail with invalid_input naming the field, and the call is not billed. That is the distinctive failure this landing exists to catch: any input that is not a finite number is rejected instead of silently becoming zero or Infinity. Pair the amount with your own forecast of growth and cost of equity; this endpoint measures the identity only and does not annualize, currency-convert, or discount. Keep the five required fields as JSON numbers or numeric strings, never as booleans, so the solver can reject a non-finite input without guessing a cash flow of zero.
Where a free cash flow to equity calculator earns its keep
Portfolio scripts can call the same module in a loop over many periods; each item is one request, the unit is item, and the free browser path remains byte-for-byte identical to the API so a landing-page preview never lies about the figure that will be stored after a save.
Technical questions
What happens if an input is not a finite number?
The task fails with invalid_input. A missing, empty, boolean, NaN, or infinite value is not a well-posed cash-flow input, so no FCFE is invented and the call is not billed.
What does the free cash flow to equity calculator cost?
The browser tool is free. API requests use prepaid KIT balance at $0.002 per successful call; invalid input is not billed.