Free calculator · Corporate Finance
FCFF & FCFE, Free Cash Flow to the Firm and to Equity
Calculates free cash flow to the firm and free cash flow to equity from the same operating inputs, showing where the two measures diverge. Inputs are EBIT, the tax rate, depreciation and amortization, capital expenditures, the change in net working capital, interest expense, and net borrowing.
By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026
From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.
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FCFF & FCFE, Free Cash Flow to the Firm and to Equity
FCFF · to all capital
$1.10M
pre-debt
FCFE · to equity
$1.35M
after debt
After-tax EBIT
$1.50M
EBIT × (1 − tax), FCFF start
Net income
$1.35M
(EBIT − interest) × (1 − tax), FCFE start
FCFF is pre-debt cash to all providers; FCFE then adds net borrowing to show what reaches equity. The sign students reverse most: an increase in net working capital is a use of cash, subtracted in both.
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This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.
When to use this measure
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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.