[b]Levered Free Cash Flow[/b]
The Levered Free Cash Flow shows you the amount of cash available to pay shareholders after it has paid its debt. It can be a very important figure.
The formula looks like this
(Cash flow from operations) – (Capitol expenditures)
[color=Blue]This number is very important because unlike earnings or income statements, which can be easily tweaked, it is very hard to manipulate cash flow.[/color]
It is also important because the amount of cash a company has after paying its bills can be used to help make shareholders money. For example a company can use their earning to reinvest in the company and/or to give out money to their shareholders as dividends.
If a company does have a high levered free cash flow makes sure it is best to find one that pays out dividends as well as reinvest in itself. You do not want to invest in a company with lots of cash flow but foolishly spends it.
[url] http://www.stocks-simplified.com/levered_free_cash_flow.html [/url]
free cash flow
Operating cash flows (net income plus amortization and depreciation) minus capital expenditures and dividends.
Free cash flow is the amount of cash that a company has left over after it has paid all of its expenses, including investments.
Negative free cash flow is not necessarily an indication of a bad company, however, since many young companies put a lot of their cash into investments, which diminishes their free cash flow. But if a company is spending so much cash, it should have a good reason for doing so and it should be earning a sufficiently high rate of return on its investments.
While free cash flow doesn't receive as much media coverage as earnings do, it is considered by some experts to be a better indicator of a company's financial health.
[url] http://www.investorwords.com/2084/free_cash_flow.html [/url]