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What Is Unlevered Free Cash Flow (UFCF)? Definition and Formula

By Benjamin Locke – Jan 8, 2025 at 3:10PM

Key Points

  • Unlevered free cash flow (UFCF) shows the true cash flow of firms by excluding debt impacts, aiding clear operational assessment.
  • It allows comparisons across companies regardless of their debt levels, focusing on operational cash generation.
  • Analysts use UFCF in discounted cash flow models to determine a firm's value, focusing on cash capabilities, not debt.
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