How To Calculate Levered Cash Flow in Sage 100 | Arithmix

Calculating levered cash flow is an important financial metric that can help businesses determine their true cash flow after accounting for debt and interest payments. In this article, we'll explore what levered cash flow is, when it's valuable to calculate, and how to calculate it using Sage 100.

What Is Levered Cash Flow?

Levered cash flow is a measure of a company's cash flow that takes into account its debt and interest payments. It is calculated by subtracting the company's interest payments and debt repayments from its operating cash flow. This metric gives a more accurate picture of a company's cash flow, as it accounts for the impact of debt on the business.

For example, if a company has $1 million in operating cash flow, but also has $500,000 in interest payments and $200,000 in debt repayments, its levered cash flow would be $300,000 ($1 million - $500,000 - $200,000).

When Is It Valuable To Calculate Levered Cash Flow?

Calculating levered cash flow can be valuable in a number of situations. For example, if a company is considering taking on additional debt to fund growth or expansion, it's important to understand how that debt will impact the company's cash flow. By calculating levered cash flow, the company can determine whether it will have enough cash flow to cover its debt payments and still have enough left over to invest in growth.

Similarly, if a company is considering acquiring another business or being acquired itself, levered cash flow can be an important metric to consider. The acquiring company will want to understand the target company's true cash flow after accounting for its debt and interest payments, while the target company will want to demonstrate its ability to generate cash flow even with its debt obligations.

How To Calculate Levered Cash Flow In Sage 100

To calculate levered cash flow in Sage 100, you'll need to gather a few pieces of information. First, you'll need to know the company's operating cash flow for the period in question. This can be found on the company's cash flow statement.

Next, you'll need to determine the company's interest payments and debt repayments for the same period. This information can be found on the company's income statement and balance sheet, respectively.

Once you have this information, you can calculate levered cash flow using the following formula:

Levered Cash Flow = Operating Cash Flow - Interest Payments - Debt Repayments

Simply plug in the numbers for your company and you'll have your levered cash flow for the period in question.

Overall, calculating levered cash flow is an important financial metric that can help businesses make informed decisions about debt, growth, and acquisitions. By understanding how to calculate levered cash flow in Sage 100, you'll be better equipped to make strategic financial decisions for your business.

How Do You Calculate Levered Cash Flow in Sage 100

Sage 100 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 Sage 100 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 Sage 100, 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 Sage 100 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 Sage 100 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.