Houston Chambers

What is the difference between operating cash flow and levered cash flow?

What is the difference between operating cash flow and levered cash flow? Like at the bottom of this profile: http://finance.yahoo.com/q/ks?s=ARA One is positive but the other is negative. What does that mean?

Public Comments

1. definition of levered free cash flow - The amount of cash available to stockholders after interest payments on debt are made. So if you've got positive cash flow before debt & then negative cash flow after paying debt, then I'd say you've got a lot of debt.
2. operating cash flow is cash flow from your operating activities . levered free cash flow is operating cash flow minus interest and principal payment on the company's debt. In your example it is negative because interest and principal payment amount is bigger than operating cash flow. It could be for many reasons. It could be that the company just paid down the principal payments on its bonds. Look at the statement of cash flows for these details. Also, you cannot assume the company has too much debt. You have to look at the company's balance sheet and figure out its leverage ratio. Leverage ratio depends on the type of business. Compare the leverage to its peers to determine if the firm uses more or less leverage compared to its peers.