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

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.