How To Calculate Levered Cash Flow in Zoho Books | Arithmix

Levered cash flow is an important financial metric that helps businesses understand their financial health. It is the amount of cash a company generates after accounting for its debt obligations. This metric is particularly useful for businesses that have taken on debt to finance their operations or growth. In this article, we will explain what levered cash flow is and how to calculate it.

What Is Levered Cash Flow?

Levered cash flow is the amount of cash a company generates after accounting for its debt obligations. This metric takes into account the interest payments a company makes on its debt and the principal payments it makes to repay the debt. Levered cash flow is an important metric because it helps businesses understand how much cash they have available to service their debt obligations and invest in their operations.

To calculate levered cash flow, you need to start with the company's net income. Net income is the amount of money a company earns after accounting for all its expenses, including taxes. You then add back any non-cash expenses, such as depreciation and amortization. Next, you subtract the company's interest expense and any principal payments it makes on its debt. The resulting number is the company's levered cash flow.

It's important to note that levered cash flow is not the same as free cash flow. Free cash flow is the amount of cash a company generates after accounting for all its expenses, including capital expenditures. Levered cash flow only takes into account the company's debt obligations.

When Is It Valuable To Calculate Levered Cash Flow?

Calculating levered cash flow is particularly valuable for businesses that have taken on debt to finance their operations or growth. By understanding their levered cash flow, these businesses can determine how much cash they have available to service their debt obligations and invest in their operations. This information is critical for making informed financial decisions and managing cash flow.

Levered cash flow is also useful for investors who are evaluating a company's financial health. By looking at a company's levered cash flow, investors can determine whether the company has enough cash to service its debt obligations and invest in its operations. This information can help investors make informed decisions about whether to invest in a company.

In conclusion, levered cash flow is an important financial metric that helps businesses understand their financial health. By calculating levered cash flow, businesses can determine how much cash they have available to service their debt obligations and invest in their operations. This information is critical for making informed financial decisions and managing cash flow.

How Do You Calculate Levered Cash Flow in Zoho Books

Zoho Books 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 Zoho Books 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 Zoho Books, 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 Zoho Books 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 Zoho Books 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.