Debt-free cash-free
A pricing convention quoting enterprise value before agreed cash and debt adjustments used to determine equity value. Definitions, reference dates and adjustment mechanisms are set by the transaction agreement; equity price is not necessarily computed at closing.
Also called Cash-free debt-free, DFCF
Debt-free cash-free in round numbers
Hypothetical, in US$ millions: enterprise value 100 minus agreed debt 20 plus eligible cash 5 gives equity value 85 before other adjustments and costs. This is not guaranteed seller cash proceeds. Cash already distributed to the seller must not be added again as cash remaining in the company.
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| Item | Amount |
|---|---|
| Enterprise value | 100 |
| Less agreed debt | −20 |
| Plus eligible cash | +5 |
| Equity value before other adjustments / costs | 100 − 20 + 5 = 85 |
Terms Related to Debt-free cash-free
Working capital peg · Sources & Uses · Cash flow statement · Locked box vs completion accounts · Enterprise value · All of the glossary