Free cash flow to equity (FCFE) can be computed as:
FCFE = CFO − FCInv + net borrowing
Based on the figures included in the example, fixed capital investment (FCInv) is –$223 (= $22,499 − $22,722) and net borrowing is –$1,016 (= $2,491 + $4,528 − $2,996 − $5,039).
FCFE is therefore: FCFE = $1,981 + $223 − $1,016 = $1,188
