LIABILITY ADJUSTED CASH FLOW YIELD - LACFY

A fundamental analysis computation, which aims to compare a firm’s free cash flow and unsettled liabilities in the similar period. This can be used to evaluate how long a buyout will take for to be profitable or get the company’s worth. To calculate LACFY, use the formula below:

Average Free Cash Flow [(Outstanding Shares + Options + Warrants) x (Per Share Price) - Liabilities] - [Current Assets - Inventory]

This is not used in valuing a company. If the discrepancy between LACFY and Treasury yield is small, the investment is less desirable.