How To Calculate Levered Free Cash Flow in Deltek Vision | Arithmix

Calculating levered free cash flow is an important task for any business owner or investor. It helps to determine the amount of cash that a company has available to pay its debts and invest in growth opportunities. Levered free cash flow is calculated by subtracting the company's capital expenditures and debt payments from its operating cash flow. In this article, we will discuss what levered free cash flow is, when it is valuable to calculate it, and how to calculate it in Deltek Vision.

What Is Levered Free Cash Flow?

Levered free cash flow is a financial metric that measures the amount of cash a company generates after paying its debts and investing in its growth. It is a measure of a company's financial health and its ability to pay dividends, buy back shares, or invest in new projects. Levered free cash flow takes into account the company's capital expenditures and debt payments, which are subtracted from its operating cash flow to arrive at the final figure.

Levered free cash flow is an important metric for investors and analysts because it provides a more accurate picture of a company's financial health than other metrics like net income or earnings per share. It takes into account the company's cash flow and its ability to generate cash from its operations, which is a key indicator of its long-term sustainability.

When Is It Valuable To Calculate Levered Free Cash Flow?

Calculating levered free cash flow is valuable in a variety of situations. For example, if you are an investor looking to buy shares in a company, you may want to calculate its levered free cash flow to determine whether it is a good investment. If a company has a high levered free cash flow, it may be a sign that it is financially healthy and has the ability to pay dividends or invest in new projects.

Similarly, if you are a business owner, you may want to calculate your company's levered free cash flow to determine whether you have enough cash available to pay your debts and invest in growth opportunities. If your levered free cash flow is low, it may be a sign that you need to cut costs or increase revenue to improve your financial health.

How to Calculate Levered Free Cash Flow in Deltek Vision

To calculate levered free cash flow in Deltek Vision, you will need to follow these steps:

1. Calculate the company's operating cash flow by subtracting its operating expenses from its revenue.
2. Calculate the company's capital expenditures by adding up all of its investments in property, plant, and equipment.
3. Calculate the company's debt payments by adding up all of its interest payments and principal repayments.
4. Subtract the company's capital expenditures and debt payments from its operating cash flow to arrive at the levered free cash flow.

By following these steps, you can calculate levered free cash flow in Deltek Vision and use it to make informed investment or business decisions.

How Do You Calculate Levered Free Cash Flow in Deltek Vision

Deltek Vision 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 Deltek Vision 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 Deltek Vision, 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 Deltek Vision 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 Deltek Vision 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.