Levered Cash Flow

What is Levered Cash Flow (LCF)?

Levered cash flow (LCF) is the cash a business has after it takes care of operating expenses, interest and other financial obligations. This formula can help companies find their LCF:

Levered cash flow = EBITDA - change in net working capital - capital expenditures - debt payments

Once you complete the formula above, you’ll know how much money your business can use to pay dividends and make investments. The higher your LCF, the more appealing your company will be to financers.

Related terms

3 Way Match

3-way matching refers to a three-step process of matching three key documents before processing a payment to a supplier.

30-Day and 13-Week Operating Cash Burn

30-day and 13-week operating cash burn are also known as the “burn rate.” These are the rates at which a business consumes its cash reserves when it isn’t bringing in profit.

Accounts Payable Automation

Accounts payable automation (AP Automation) refers to the use of technology and software solutions to streamline and optimize the accounts payable process within an organization.

Accounts Payable Days

Accounts Payable Days (AP Days), also referred to as Days Payable Outstanding (DPO), is a financial ratio that measures the average time a company takes to pay its suppliers or vendors for credit purchases.

Accounts Payable Turnover

Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.

Accounts Receivable Turnover

The accounts receivable turnover ratio (or debtor turnover ratio) allows businesses to evaluate their debt collection efficiency.