Cash Flow Analysis
Free Cash Flow to Equity
Definition
What is Free Cash Flow to Equity?
Cash flow available to ordinary shareholders after operating needs, investmentAn asset or commitment of money made with the expectation of future income, growth, or both., and net debtInterest-bearing debt minus cash and cash equivalents. flows.
Example in practice
How This Looks in Practice
An equity analyst discounts FCFE at the cost of equityThe return required by equity investors for bearing ownership risk..
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Related Terms
Cash Flow Analysis
Operating Cash Flow
Cash generated or used by a company's core operations.
Cash Flow AnalysisInvesting Cash Flow
Cash used for or received from buying and selling long-term assets and investments.
Cash Flow AnalysisFinancing Cash Flow
Cash flows arising from debt, equity, dividends, and other financing transactions.
ValuationMarket Value
The price at which an asset could trade in the market at a given time.