What is Debt Free Cash Free?
Are you willing to expand the operations of your company through debt relief services and you have found the perfect bolt-on business? The corporate financial advisers of the seller have proposed that the deal is structured on a Debt Free Cash Free basis. But what does this actually imply? A Brief Debt free cash free (DFCF) is a valuation method as well as a debt relief program of the focus company during a transaction of the acquisition. The DFCF valuation accounts for the business value and is exclusive of financial impacts of net cash or net debt that existed during the process of closing. Explanation to the Theory The calculation of DFCF is a standard of measure brought into use for merger and acquisition transactions in order to arrive at a price of purchase as well as debt relief. During the process of due diligence, the target company and the acquirer have to make out which items are considered cash (to illustrate, customer deposits) and which items are c...