Alibaba Group Holding Limited

Price To Levered Free Cash Flow (P/FCFE)

Alibaba Group Holding Limited had a price to levered free cash flow ratio of 3.38 at the end of FY 2021.

The price to levered free cash flow ratio relates a company's valuation to its levered free cash flow. It is calculated by dividing the market capitalization by the levered free cash flow. Levered free cash flow, also called "Free Cash Flow to Equity (FCFE)", is calculated by subtracting the company's debt repayments from its free cash flow. A company with a small positive P/FCFE ratio may represent better value than a company with a high ratio.

A company can use the levered free cash flow it generates to invest back into the company or pay out to shareholders in the form of dividends or share buybacks. The levered free cash flow is commonly used in the Discounted Cash Flow (DCF) model to value companies.

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