The Free Cash Flows Schedule is responsible for the calculation of unlevered and levered free cash flows. The calculation and presentation of unlevered free cash flows for levered investments provides helpful context to understand the cash generating power of a business absent financial leverage and help the analyst isolate the impact of debt on overall returns.
The levered free cash flows are ultimately the true cash generated by a levered business and are inputs into the debt and tax schedules.
Unlevered Free Cash Flow is calculated as:
EBITDA
(-) Capex
(-) Unlevered Taxes
(+/-) Changes in NWC
Levered Free Cash Flow is calculated as:
EBITDA
(-) Capex
(-) Levered Taxes
(+/-) Changes in NWC
(-) Cash (net) Interest
For an Excel sample Unlevered & Levered Free Cash Flow Calculation, as well as Unlevered and Levered Yields, email us at info@mosaic.pe