1 Answers: Valuing a Business based on Levered Free Cash Flow

Question

I am trying to understand how I can use Levered Free Cash Flow to evaluate a business. For example, **$KHC has a levered fcf** **of 3.16B** according to yahoo finance. It **currently has a market cap of 64B**. To look at this extremely simplistically, would that mean that assuming all the fcf was returned to shareholders and assuming fcf stays unchanged throughout time, it would take **64B/3.16B = approx. 21 years** to get my return on investment at this share price?

What is the best way to use Levered FCF to calculate a business’ ability to return on my investment? I realize there are a bazillion other factors that go into an evaluation of a stock, but I want to have some idea of how to use this metric.

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Anonymous 6 months 1 Answer 56 views 0

Answer ( 1 )

  1. I also would like to know more about how to apply models like Levered Free Cash Flow for finding the intrinsic value of stocks. Please share by experienced investor.

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