UFCF (Unlevered Free Cash Flow)
Adj EBITDA − Taxes − Maintenance CapEx − Change in NWCUFCF represents cash flow before debt service obligations. It is used for DCF (Discounted Cash Flow) analysis and represents the cash flow available to all capital providers.
How it's used in a deal
Used in DCF valuation models and as the basis for enterprise value calculations.
Important caveat
UFCF does not deduct interest or debt payments. It is a pre-debt-service metric.
Frequently asked questions
What's the difference between UFCF and CFADS?
UFCF is capital-structure-agnostic — cash flow to everyone (lender and owner together) before financing decisions. CFADS additionally deducts a replacement owner salary and answers the lender's question: what's left to pay the loan. UFCF drives valuation; CFADS drives financeability.
Why use a DCF for a small business at all?
As a sanity check, not a headline number. Multiples of SDE/EBITDA reflect what buyers actually pay; a DCF on UFCF shows whether that market price is consistent with the cash the business generates under explicit growth and risk assumptions.
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Related metrics
Educational content from a decision-support tool — not a CPA audit, review, or assurance engagement, and not tax, legal, or investment advice.