EV to Free Cash

This ratio is the enterprise value (EV) of a company divided by its free cash flow (FCF), which refers to cash flow available to all capital providers (both equity and debt providers) of the company. A high EV/FCF may indicate that a company is overvalued, and vice versa.

$$//<![CDATA[ \begin{array}{l}\displaystyle EV/FCF_{t} = \frac{EV_{t}}{FCF_{t}} = \frac{P_{t} + TD_{t} - Cash_{t} - Investments_{t}}{CFADS_{t} - DS_{t} - Cash_{t-1}}\end{array} //]]>$$

where:

$//<![CDATA[ \begin{array}{l}P_{t}\end{array} //]]>$ is the equity value of company $//<![CDATA[ \begin{array}{l}i\end{array} //]]>$ at time  $//<![CDATA[ \begin{array}{l}t\end{array} //]]>$
$//<![CDATA[ \begin{array}{l}\textit{TD}_{t}\end{array} //]]>$ is the total debt of the company, including both long-term and short-term debt on the balance sheet
$//<![CDATA[ \begin{array}{l}CFADS_{t}\end{array} //]]>$ is the cash flow available for debt service (free cash flow) at time $//<![CDATA[ \begin{array}{l}t\end{array} //]]>$
$//<![CDATA[ \begin{array}{l}DS_{t}\end{array} //]]>$ is the senior debt service at time  $//<![CDATA[ \begin{array}{l}t\end{array} //]]>$ 
$//<![CDATA[ \begin{array}{l}Cash_{t}\end{array} //]]>$ is the total cash in the bank at time  $//<![CDATA[ \begin{array}{l}t\end{array} //]]>$
$//<![CDATA[ \begin{array}{l}Cash_{t-1}\end{array} //]]>$ is the total cash in the bank at time  $//<![CDATA[ \begin{array}{l}t\end{array} //]]>$