Levered Free Cash Flow (LFCF) measures how much cash a firm can generate after accounting for all operating expenses, taxes, interest expenses, and obligatory debt repayments.Depreciation is not a cash expense that is paid by the firm. To calculate the free cash flow, we need to add the depreciation expense back the to net income and deduct the real capital expenditure.The increase in non-cash working capital in year t is the following formula:Net borrowing refers to the net amount of funds a company obtains through debt in a specific period:
Learn Levered Free Cash Flow (LFCF) with interactive examples and practice exercises in our Valuation module.
This interactive learning module helps you understand Levered Free Cash Flow (LFCF) through hands-on practice and real-world examples.