FCFE
Business & Finance abbreviation · Finance
| Stands for | Free cash flow to equity |
|---|---|
| Categories | Business & Finance |
FCFE stands for Free cash flow to equity, a finance abbreviation.
Cash flow available to common shareholders after operating costs, taxes, reinvestment and all payments to and from lenders, including interest and net borrowing. It is discounted at the cost of equity to value the equity directly.
Example: The analyst valued the insurer on FCFE because its debt is part of operations rather than financing.
Usage notes
FCFE equals FCFF minus after-tax interest plus net borrowing, and it is also called levered free cash flow. It is often preferred for banks and insurers, where operating and financing cash flows are hard to separate, and it indicates how much a company could pay out in dividends and buybacks.
Related abbreviations
More finance abbreviations
- ERP – Equity risk premium
- ESOP – Employee stock ownership plan
- EV – Enterprise value
- EV/EBITDA – Enterprise value to EBITDA
- EVA – Economic value added
- FCF – Free cash flow
- FCFF – Free cash flow to the firm
- FICC – Fixed income, currencies and commodities
- FP&A – Financial planning and analysis
- FV – Future value
- GP – General partner
- HNWI – High-net-worth individual