Courses / Cash Flow / Levered Free Cash Flow (LFCF)

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Levered Free Cash Flow (LFCF) (6:24)

Levered Free Cash Flow ("LFCF") represents the amount of Free Cash Flow before accounting for interest expense and interest income.

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Nathan Marsh
9 months ago

Loving this section of the course so far guys. A quick question in regards to Levered Free Cash Flow:   Online I’ve noticed other people calculate Levered Free Cash Flow as Cash Flow from Operations – Total CapEx – debt repayment, which would would then give us the free cash flow left for equity investors.   However, we’re calculating Levered Free Cash Flow as Cash Flow from Operations – Total CapEx, and we don’t minus the debt repayment.   Why is this? I thought the calculation we’re using for Levered Free Cash Flow here is the calculation to find general… Read more »

Last edited 9 months ago by Nathan Marsh
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Y Ogino
3 months ago
Reply to  Lumovest

Great answer; I was also confused by this part but this clears things up brilliantly. Thank you!

This does give rise to another question however – if the difference between unlevered and levered FCF is just the interest expense, when is the unlevered FCF useful?

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Eddie Wu
10 months ago

Can you explain what is the working capital ? Thanks

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Eddie Wu
10 months ago
Reply to  Lumovest

Got it! Thank you for your detailed explanation!
Love what you guys doing here! Amazing work!

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