Debt-Adjusted Cash Flow - DACF
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Definition of 'Debt-Adjusted Cash Flow - DACF'
A financial ratio commonly used in the analysis of oil companies, representing the after-tax operating cash flow, excluding financial expenses after taxes.
Debt-adjusted cash flow (DACF) is calculated as follows:
DACF = cash flow from operations + financing costs (after tax) + exploration expenses (before tax) +/- working capital adjustment
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Investopedia explains 'Debt-Adjusted Cash Flow - DACF'
DACF is often used in the financial ratio EV/DACF, where EV is the enterprise value of the company being analyzed. This ratio is used in place of EV/EBITDA as a valuation ratio. This ratio is good for use in the oil industry because it is an after-tax calculation (good for an industry with high resource taxes) and independent of companies' financing decisions.
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Search results for 'Debt-Adjusted Cash Flow (DACF)'
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http://www.investopedia.com/articles/basics/11/common-multiples-used-in-oil-and-gas-valuation.asp
... decrease. Enterprise Value/Debt-Adjusted Cash Flow: EV/DACF The capital
structure of oil and gas firms can be dramatically different. ...
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http://stocks.investopedia.com/stock-analysis/2012/Three-Reasons-To-Own-Eni-E-XOM-COP-BP-CVX0215.aspx
... Valuing its upstream activities using debt adjusted cash flow (DACF), the asset
manager suggests the assets are worth between about $79.4 billion and $97.1 ...
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