1. Levered cash flow can also be called levered free monies,
and it is a very important figure that is used to determine
the profitability and effectiveness of any business. Those
calculations which are used to decide upon what a
company's levered free money flow are very important
features of what is going to be on the report. It also
provides a way to assess the attractiveness that company
holds for investors. That means that this is a very
important part of the whole process for determining what
the worth of that company is and whether or not it will be
a good investment for the future.
2. Part of the process of determining the levered cash flow
for any company is to calculate what that company's un-
levered money is. That un-levered money is simply the
amount of capital that a particular company has generated
prior to paying out on debts or even the interest that is
added to that debt. This amount is calculated by the
simple method of subtracting all the capital expenditures
such as taxes, expenses, and other changes affecting the
working capital from its earnings before taxes,
deprecation, amortization, and others.
3. Stated again, levered cash flow is the results of what
happens when the un-levered cash has had all the
outstanding debts or other payouts from the company
which includes even those interest repayments that take
place on debt. It is this factor that must be taken into
consideration when you are calculating what a company's
credit record is going to be. It is what determines whether
a company is going to be able to meet the commitments it
has to debts, and how effective the management is using
the money generated by that company. It provides an
overall general view of a company's health.
4. When you calculate the levered cash flow of a company is
a very accurate reflection of any company's financial
health because it includes all the outstanding debts and
commitments of that company. If the figure which is
arrived at while making these calculations is a negative
balance, or in other words that company is spending more
than it takes in it is not making a profit. This might mean
that the company has made investments that will benefit
it in the future such as up dated technology which will
increase its future performance, or it could mean that it is
ineffective in generating revenue.