Levered Free Cash Flow Calculator

How to Calculate Levered Free Cash Flow?

Levered free cash flow represents the cash remaining for equity holders after all obligations have been met — including debt repayments and interest expenses.

The formula is:

Levered Free Cash Flow = Net Income + Depreciation & Amortization (D&A) - Change in Net Working Capital (ΔNWC) - Capital Expenditures (CapEx) + Net Borrowing

Explanation of Components:

• Net Income: Profit after taxes and interest.
• Depreciation & Amortization (D&A): Non-cash expenses added back to reflect true cash flow.
• ΔNWC (Change in Net Working Capital): Cash tied up or released in day-to-day operations.
• CapEx: Cash spent on long-term investments, like new equipment or technology.
• Net Borrowing: The difference between new debt issued and repayments made during the period.

How to Use the Levered Free Cash Flow Calculator?

Using the Enerpize Levered Free Cash Flow Calculator is quick and simple:

1. Enter your Net Income — the profit after taxes and interest.
2. Add Depreciation & Amortization (D&A) — to reflect non-cash charges.
3. Input Change in Net Working Capital (ΔNWC) — positive if it increased, negative if it decreased.
4. Add Capital Expenditures (CapEx) — cash spent on investments or assets.
5. Enter Net Borrowing — new loans minus repayments.
6. Click “Calculate LFCF” to see your result instantly.

The calculator will display your Levered Free Cash Flow value, along with a visual breakdown chart to show how each component impacts your total cash flow.

You might also find this helpful: Levered Free Cash Flow Template

Examples of Calculating Levered Free Cash Flow

Let’s bring this to life with two short business stories:

Example 1: “The Expanding Coffee Chain”

Emma owns a small chain of coffee shops. In 2024, she reported:

• Net Income: $250,000
• D&A: $30,000
• ΔNWC: +$10,000
• CapEx: $50,000
• Net Borrowing: +$20,000

LFCF = 250,000 + 30,000 − 10,000 − 50,000 + 20,000 = 240,000

Emma’s Levered Free Cash Flow is $240,000, meaning she generated healthy post-debt cash that can be reinvested into opening new locations.

Example 2: “The Growing Tech Startup”

Alex runs a SaaS company that’s investing heavily in new infrastructure:

• Net Income: $100,000
• Depreciation & Amortization: $15,000
• Change in NWC: +$5,000
• CapEx: $80,000
• Net Borrowing: -$10,000

LFCF = 100,000 + 15,000 − 5,000 − 80,000 − 10,000 = 20,000

Result: Levered Free Cash Flow = $20,000

Although Alex is repaying some debt and investing in infrastructure, the business is still generating positive cash flow — a good sign of sustainable growth.

Disclaimer

This calculator and its results are provided for informational purposes only and should not be considered financial, tax, or investment advice. Actual cash flow results may vary depending on accounting practices, data accuracy, and business context.

FAQs

How to calculate levered FCF from EBIT?

EBIT (Earnings Before Interest and Taxes) measures operating profit before financing.

To get Levered Free Cash Flow (LFCF) from EBIT:

LFCF = (EBIT - Interest Expense) × (1 - Tax Rate) + Depreciation & Amortization - Change in Net Working Capital - Capital Expenditures + Net Borrowing

How to calculate levered FCF from EBITDA?

EBITDA excludes depreciation, amortization, interest, and taxes.

To move from EBITDA to LFCF, account for everything that affects cash but is not included in EBITDA.

LFCF = EBITDA - Net Interest Expense - Taxes - Change in Net Working Capital - Capital Expenditures + Net Borrowing

How to get levered free cash flow from revenue?

Starting from Revenue, you must move down the income statement step by step: 

LFCF = Revenue - COGS - Operating Expenses - Interest Expense - Taxes Paid + Depreciation & Amortization - Change in Net Working Capital - Capital Expenditures + Net Borrowing

This converts top-line revenue into bottom-line levered cash available for shareholders after all obligations. 

What is the formula for levered FCF?

The equation for levered FCF:

Levered Free Cash Flow = Net Income + Depreciation & Amortization (D&A) - Change in Net Working Capital (ΔNWC) - Capital Expenditures (CapEx) + Net Borrowing

How to calculate levered cash flow in real estate?

In real estate, “levered cash flow” means cash flow after debt service.

Levered Cash Flow = Net Operating Income (NOI)−Debt Service (Principal + Interest)

Where:

• NOI = Income from property after operating expenses (but before financing).
• Debt service includes mortgage principal and interest payments.