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What Is Free Cash Flow to Equity (FCFE)? Formula and Example

By Kristi WaterworthUpdated Aug 28, 2025 at 6:39 PM | Fact-checked by Frank Bass

Key Points

  • FCFE shows a company's money left after paying bills, essential for assessing financial health.
  • To calculate FCFE: net income + depreciation - capex - working capital + net debt.
  • Positive FCFE suggests self-funding ability, while negative FCFE indicates likely borrowing.

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