How To Calculate Levered Free Cash Flow in Blackbaud Financial Edge | Arithmix

Levered Free Cash Flow (LFCF) is a financial metric that measures the amount of cash a company generates after accounting for its debt obligations. It is a valuable tool for investors and analysts to evaluate a company's financial health and its ability to pay off its debts. Calculating LFCF in Blackbaud Financial Edge is a straightforward process that involves a few key steps.

The first step in calculating LFCF is to determine the company's Free Cash Flow (FCF). FCF is the cash generated by the company's operations after accounting for capital expenditures. It is calculated by subtracting capital expenditures from operating cash flow. Once you have determined the FCF, the next step is to account for the company's debt obligations.

To calculate LFCF, you need to subtract the company's interest expenses and debt repayments from its FCF. Interest expenses are the costs associated with the company's debt, while debt repayments are the principal payments made on the company's outstanding debt. By subtracting these expenses from the FCF, you can determine the amount of cash the company has available to pay off its debts.

Once you have calculated the LFCF, you can use it to evaluate the company's financial health and its ability to pay off its debts. A positive LFCF indicates that the company has enough cash to pay off its debts, while a negative LFCF suggests that the company may struggle to meet its debt obligations.

What Is Levered Free Cash Flow?

Levered Free Cash Flow (LFCF) is a financial metric that measures the amount of cash a company generates after accounting for its debt obligations. It is calculated by subtracting the company's interest expenses and debt repayments from its Free Cash Flow (FCF). LFCF is a valuable tool for investors and analysts to evaluate a company's financial health and its ability to pay off its debts.

LFCF takes into account a company's debt obligations, which can have a significant impact on its financial health. By subtracting interest expenses and debt repayments from the FCF, LFCF provides a more accurate picture of the company's cash flow and its ability to pay off its debts. LFCF is also useful for comparing companies with different levels of debt, as it provides a standardized measure of their financial health.

When Is It Valuable To Calculate Levered Free Cash Flow?

Calculating Levered Free Cash Flow (LFCF) is valuable in a variety of situations. It is particularly useful for investors and analysts who are evaluating a company's financial health and its ability to pay off its debts. LFCF takes into account a company's debt obligations, which can have a significant impact on its cash flow and its ability to meet its financial obligations.

LFCF is also useful for comparing companies with different levels of debt. By providing a standardized measure of their financial health, LFCF allows investors and analysts to compare companies on an equal footing. This can be particularly valuable when evaluating companies in the same industry or sector.

Overall, calculating LFCF is a valuable tool for investors and analysts who are looking to evaluate a company's financial health and its ability to pay off its debts. By taking into account a company's debt obligations, LFCF provides a more accurate picture of its cash flow and its ability to meet its financial obligations.

How Do You Calculate Levered Free Cash Flow in Blackbaud Financial Edge

Blackbaud Financial Edge itself isn’t naturally geared towards letting you calculate complex metrics like Levered Free Cash Flow. As an alternative, teams typically use products like Arithmix to import data from Blackbaud Financial Edge 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 Blackbaud Financial Edge, combine it with data from other systems, and create calculations like Levered Free 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 Free Cash Flow in Arithmix

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

Arithmix is designed to give you the power to build any calculations you want on top of your Blackbaud Financial Edge 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.