How To Calculate Levered Cash Flow in Kantana | Arithmix

Levered cash flow is a financial metric that measures the amount of cash a company generates after paying its debt obligations. It is an important measure of a company's financial health and is often used by investors and analysts to evaluate a company's ability to pay its debts and generate profits. In this article, we will discuss how to calculate levered cash flow and when it is valuable to do so.

What Is Levered Cash Flow?

Levered cash flow is calculated by subtracting a company's interest expenses and debt payments from its operating cash flow. Operating cash flow is the cash generated by a company's core business operations, while interest expenses and debt payments are the costs associated with borrowing money. By subtracting these costs from operating cash flow, we can determine how much cash a company has available to pay its debts and distribute to its shareholders.

Levered cash flow is an important measure of a company's financial health because it takes into account the company's debt obligations. A company with high levels of debt may have a lower net income, but if it generates a high level of operating cash flow, it may still be able to pay its debts and generate profits. On the other hand, a company with low levels of debt may have a high net income, but if it generates a low level of operating cash flow, it may struggle to pay its debts and may not be as financially healthy as it appears.

When Is It Valuable To Calculate Levered Cash Flow?

Calculating levered cash flow is valuable in a variety of situations. For example, investors may use levered cash flow to evaluate a company's ability to pay its debts and generate profits. If a company has a high level of levered cash flow, it may be a good investment because it has the ability to pay its debts and generate profits for its shareholders.

Similarly, lenders may use levered cash flow to evaluate a company's ability to repay its debts. If a company has a high level of levered cash flow, it may be more likely to be approved for a loan because it has the ability to repay the loan.

Finally, companies may use levered cash flow to evaluate their own financial health. By calculating their levered cash flow, companies can determine how much cash they have available to pay their debts and distribute to their shareholders. This information can help companies make decisions about how to allocate their resources and plan for the future.

In conclusion, levered cash flow is an important financial metric that measures a company's ability to pay its debts and generate profits. By subtracting a company's interest expenses and debt payments from its operating cash flow, we can determine how much cash a company has available to pay its debts and distribute to its shareholders. Calculating levered cash flow is valuable for investors, lenders, and companies themselves, as it provides important information about a company's financial health and ability to generate profits.

How Do You Calculate Levered Cash Flow in Kantana

Kantana itself isn’t naturally geared towards letting you calculate complex metrics like Levered Cash Flow. As an alternative, teams typically use products like Arithmix to import data from Kantana and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Kantana, combine it with data from other systems, and create calculations like Levered Cash Flow.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Levered Cash Flow in Arithmix

Calculating metrics like Levered Cash Flow is simple in Arithmix. Once you've created your free account, you’ll be able to import your Kantana data, and use it to create natural language formulas for metrics like Levered Cash Flow.

Arithmix is designed to give you the power to build any calculations you want on top of your Kantana data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.