Unlevered Free Cash Flow
The free-cash-flow figure that represents the cash the business itself generates, independent of how it is financed. Also called Free Cash Flow to the Firm (FCFF). Computed practically as Operating Cash Flow plus after-tax interest expense minus Capital Expenditures — the interest add-back is required because interest was already subtracted from net income, which feeds the indirect-method OCF walk. Unlevered FCF is the standard input for DCF valuation because it captures the cash available to all capital providers (debt and equity together) and is therefore comparable across companies with different capital structures.
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Related terms
Accounts Payable · Adjusted EBITDA · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay
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