Free Cash Flow To Equity or FCFE
FCFE is a measure used to determine how much cash is available to pay to a company's equity shareholders after accounting for all expenses, reinvestment, and debt repayment. FCFE is commonly used to gauge the health of companies. Positive FCFE indicates what can be paid out to equity holders (as a dividend or repurchased stock) without harming the firm's operations or growth opportunities while negative FCFE, it implies that the firm must issue new equity to raise cash.
The formula is given by:
FCFE = Net Income - Net - Change in Net Working Capital + New Debt - Debt Repayment.