Levered Free Cash Flow
The free-cash-flow figure that is left over for equity holders after all lender claims have been paid. Computed as Operating Cash Flow minus Capital Expenditures, with no interest add-back. Practitioners use levered FCF to assess dividend capacity, buyback runway, and the cash truly available to shareholders. Contrast with unlevered FCF (cash to the firm before any financing decisions), which is the standard input for enterprise-value-based valuation. The gap between the two — roughly equal to after-tax interest expense — is the cost of the company's capital structure expressed in cash.
Lessons that use this term
Related terms
Accounts Payable · Adjusted EBITDA · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay
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