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Equity Cash Flow Reconciliation

Reconcile cash available to equity using net income, operating earnings, operating cash flow or firm cash flow.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Net income of 1,000, noncash charges of 200, capital investment of 300, working-capital investment of 100 and net borrowing of 200 give FCFE of 1,000.

FCFE = net income + D&A − capital investment − working capital investment + net borrowing.

Worked example

Enter these known values and leave the other values blank.

Calculate using
Net income
Net income
1000 USD
Depreciation and amortization
200 USD
Fixed capital investment
300 USD
Working capital investment
100 USD
Beginning total debt
500 USD
Ending total debt
700 USD
Net borrowing
200 USD
Free cash flow to equity (FCFE)
1000 USD

Assumptions and limitations

  • Use consistent cash-flow definitions and reporting periods. Positive working-capital investment is a use of cash; debt increase is a source.
  • The income and earnings branches use a simplified effective tax relationship. The CFO branch assumes interest is already included in CFO.
  • Enter all money amounts in one currency. The retained currency conversion menu uses captured historical conversion factors, not current exchange quotes.
  • Clear an unknown editable field before solving an inverse; fixed selections and output-only fields cannot be inferred.

Common questions

What does this calculation assume?

Use consistent cash-flow definitions and reporting periods. Positive working-capital investment is a use of cash; debt increase is a source.

Are these current exchange rates?

No. Use one currency consistently; currency menu factors are a historical snapshot.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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