Unlevered Free Cash Flow - UFCF

Ignore the interest payments. Then just look at the free cash flow.

What a weird request, huh? Well, when you get rid of the "levered" part of a company (i.e. their capital structure, likely engineered by snappy, sharp bankers, and not by the people who actually operate the company), you see through the banking and just get a picture of the health of the business itself.

Some businesses are doing just fine operationally...they just have too much debt. Either by dint of their own fault, ignorance, greed, whatever...they convinced a bank to loan them money that shouldn't have been loaned. So maybe the debt needs to be rejiggered, so as to be paid off later or at lower or different rates. That's why you look at the unlevered free cash flow numbers verus free cash flow net of debt payments. If the business is still healthy, generating lots of free cash, then there's hope that the company can go on and on...