Unlevered vs. Levered Free Cash Flow

Unlevered and levered free cash flow measure cash available to different investors. That distinction determines which discount rate you use, whether your DCF produces enterprise value or equity value, and how you bridge to the value of a company’s shares.

Author: Ishaan Nair Updated 4 min read

The core difference: who receives the cash?

Unlevered free cash flow, or UFCF, is the cash generated by a company’s operations before accounting for interest payments and net debt activity. It represents cash available to all capital providers, including both lenders and shareholders.

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