IRR vs UFCF. whats the difference!
can someone explain to me the difference between IRR vs UFCF vs LFCF?
Thanks very much!
can someone explain to me the difference between IRR vs UFCF vs LFCF?
Thanks very much!
+153 | Why are UK, UK based and UK-countries related (India, Nigeria...) students so cringe on LinkedIn? | 58 | 27m | |
+112 | Analysts bitching on WSO | 26 | 7h | |
+110 | How are women treated in IB? | 66 | 16m | |
+65 | How to Not Feel Anxious About SA Internship | 24 | 1d | |
+62 | College Transitions updated 2024 IB ranking | 24 | 2h | |
+53 | In denial about SA 2025 Offer | 12 | 1d | |
+49 | A Guide to HK Investment Banking - 10 Most Frequently Asked Questions (2024) | 4 | 1h | |
+48 | Does my budget look right? Fresh grad | 28 | 1d | |
+43 | 5 days/wk | 19 | 4d | |
+34 | 2024 Analyst Bonus Thread | 18 | 5d |
Career Resources
What, between a rate of return and cashflow? Investopedia will serve you well.
Unlevered Free Cash Flow (UFCF) = EBITDA - Capital expenditure (CAPEX) - Working Capital It is the company's cash flow before interest payments are taken into account.
Levered Free Cash Flow (LFCF) is the amount of cash available to stockholders after interest payments on debt are made.
IRR (internal rate of return) is the discount rate to have of the future cash flows such that the net present value (NPV) is 0. So based on IRR alone, a project with a higher IRR would be more ideal project. However if the projects are mutually exclusive, using NPV would be a more accurate method of calculating.
In summary, IRR is a discount rate e.g 10%. On the other hand, UFCF is cash flow before interest payments while LFCF is the cash flow after interest payments on its debt (levered = using debt).
Hope this helps.
woozy - Thanks for the help! sorry but i should of specified my confusion.. what is the difference between irr and lfcf yield?
Laboriosam non eaque iste nisi totam reiciendis laborum. Velit autem tempora autem magnam ipsam id. Voluptas in vero doloribus voluptatibus unde hic.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...