How To Calculate Levered Cash Flow in SAP BusinessByDesign | Arithmix

Levered cash flow is an important financial metric that measures the amount of cash generated by a company after taking into account its debt obligations. It is a useful tool for investors and analysts who want to evaluate a company's ability to meet its debt obligations and generate returns for its shareholders. In this article, we will discuss how to calculate levered cash flow in SAP BusinessByDesign.

What Is Levered Cash Flow?

Levered cash flow is the cash flow generated by a company after deducting the interest payments on its debt. It is calculated by subtracting the interest expense from the operating cash flow. This metric is important because it takes into account the impact of debt on a company's cash flow. A company with high levels of debt may have lower cash flow available for investment or dividends, which can affect its ability to generate returns for its shareholders.

Levered cash flow is different from unlevered cash flow, which is the cash flow generated by a company before taking into account its debt obligations. Unlevered cash flow is a useful metric for evaluating the cash-generating ability of a company's operations, while levered cash flow is a better indicator of the cash available to service debt and pay dividends.

When Is It Valuable To Calculate Levered Cash Flow?

Calculating levered cash flow is valuable in a number of situations. For example, it can be useful for investors who are considering investing in a company with high levels of debt. By calculating the levered cash flow, investors can get a better understanding of the company's ability to service its debt and generate returns for its shareholders.

Levered cash flow is also important for companies that are considering taking on additional debt. By calculating the levered cash flow, companies can determine whether they have enough cash flow available to service the additional debt and avoid defaulting on their existing obligations.

In addition, levered cash flow is a useful metric for evaluating the financial health of a company. A company with consistently high levels of levered cash flow is likely to be in a better financial position than a company with consistently low levels of levered cash flow.

Overall, calculating levered cash flow is an important tool for investors, analysts, and companies who want to evaluate a company's ability to generate cash flow and meet its debt obligations. By following the steps outlined in this article, you can easily calculate levered cash flow in SAP BusinessByDesign and use this metric to make informed investment and financial decisions.

How Do You Calculate Levered Cash Flow in SAP BusinessByDesign

SAP BusinessByDesign 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 SAP BusinessByDesign 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 SAP BusinessByDesign, 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 SAP BusinessByDesign 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 SAP BusinessByDesign 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.