How do you calculate the free cash flow to equity (FCFE) from the unlevered cash flow (UFCF)?
If you want to value a company's equity, you need to know how much cash it can generate for its shareholders. One way to measure this is by using the free cash flow to equity (FCFE) formula. But what if you only have the unlevered cash flow (UFCF) data, which reflects the cash flow available to both debt and equity holders? How do you convert UFCF to FCFE? In this article, we will explain the difference between unlevered and levered cash flow, and show you how to calculate FCFE from UFCF in four simple steps.
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Kush Agarwalla, AFMExecutive @ AccelNorth Partners | XLRI JSR Co'26 | Advanced Financial Modeler (AFM)
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Matthew TrinderMD at Sovereign Business Transfer | Selling businesses since 2008
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Dr. Niraj SatnalikaFinancial & Strategy professional with 10+ years experience | Ex-Goldman Sachs | Ex-CRISIL | IIT Bombay | IMT Ghaziabad…