Unlevered Free Cash Flow
Unlevered Free Cash Flow is cash flow from operations minus capital expenditures and changes in working capital, not taking into account interest or debt.
Benefits
Unlevered free cash flow shows available cash for investment, indicating operational efficiency.
Frequently Asked Questions
Does unlevered mean no debt?
Yes, unlevered means the company or investment has no debt.
Why does FCF not include interest?
FCF (Free Cash Flow) does not include interest because it represents the cash available to the company before financing costs, focusing on operating efficiency.
Can you have negative unlevered free cash flow?
Yes, you can have negative unlevered free cash flow if a company’s operating costs and capital expenses are higher than its operating income.
Key Takeaway
Unlevered free cash flow highlights available cash for investments, reflecting operational efficiency.