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Western Asset Variable Rate Strategic Fd (Western Asset Variable Rate Strategic Fd) Free Cash Flow : $24.95 Mil (TTM As of Sep. 2020)


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What is Western Asset Variable Rate Strategic Fd Free Cash Flow?

Western Asset Variable Rate Strategic Fd's total free cash flow for the months ended in Sep. 2020 was $20.74 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Sep. 2020 was $24.95 Mil.

Western Asset Variable Rate Strategic Fd's Free Cash Flow per Share for the months ended in Sep. 2020 was $4.44. Its free cash flow per share for the trailing twelve months (TTM) ended in Sep. 2020 was $5.35.

Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

Western Asset Variable Rate Strategic Fd Free Cash Flow Historical Data

The historical data trend for Western Asset Variable Rate Strategic Fd's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Western Asset Variable Rate Strategic Fd Free Cash Flow Chart

Western Asset Variable Rate Strategic Fd Annual Data
Trend Sep17 Sep18 Sep19 Sep20
Free Cash Flow
1.51 7.55 7.14 24.95

Western Asset Variable Rate Strategic Fd Semi-Annual Data
Sep17 Mar18 Sep18 Mar19 Sep19 Mar20 Sep20
Free Cash Flow Get a 7-Day Free Trial 0.02 1.39 5.75 4.21 20.74

Western Asset Variable Rate Strategic Fd Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Western Asset Variable Rate Strategic Fd's Free Cash Flow for the fiscal year that ended in Sep. 2020 is calculated as

Free Cash Flow (A: Sep. 2020 )=Cash Flow from Operations+Capital Expenditure
=24.95+0
=24.95

Western Asset Variable Rate Strategic Fd's Free Cash Flow for the quarter that ended in Sep. 2020 is calculated as

Free Cash Flow (Q: Sep. 2020 )=Cash Flow from Operations+Capital Expenditure
=20.738+0
=20.74

Free Cash Flow for the trailing twelve months (TTM) ended in Sep. 2020 adds up the semi-annually data reported by the company within the most recent 12 months, which was $24.95 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Western Asset Variable Rate Strategic Fd  (NYSE:GFY) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Sep20, Western Asset Variable Rate Strategic Fd's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Sep20)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=0/16.4+0
=0.00 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.

Western Asset Variable Rate Strategic Fd Free Cash Flow Related Terms

Thank you for viewing the detailed overview of Western Asset Variable Rate Strategic Fd's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.

Western Asset Variable Rate Strategic Fd (Western Asset Variable Rate Strategic Fd) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Western Asset Variable Rate Strategic Fd Inc. (NYSE:GFY) » Definitions » Free Cash Flow
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Traded in Other Exchanges
N/A
Address
620 Eighth Avenue, 49th Floor, New York, NY, USA, 10018
Website
https://www.leggmason.com
Western Asset Variable Rate Strategic Fd Inc. is a non-diversified, closed-end management investment company. Its investment objective is to maintain a high level of current income by investing in variable rate instruments of U.S. and non-U.S. issuers. The fund invests in various sectors such as energy, materials and healthcare and others.
Executives
Brian Eakes other: Manager/Investment Manager 100 INTERNATIONAL DRIVE, BALTIMORE MD 21202
Laura F Fergerson other: Manager/Investment Manager 3310 QUALITY DRIVE, 2ND FLOOR, RANCHO CORDOVA CA 95670
George P. Hoyt officer: Secretary and Ch Lgl Officer C/O FRANKLIN TEMPLETON, 100 FIRST STAMFORD PLACE, STAMFORD CT 06902
Matthew Nicholls other: Director of Sub-Adviser ONE FRANKLIN PARKWAY, SAN MATEO CA 94403
Jed A. Plafker other: Director of Sub-Adviser ONE FRANKLIN PARKWAY, SAN MATEO CA 94403
Jennifer M Johnson other: Director of Sub-Adviser C/O FRANKLIN RESOURCES, INC., ONE FRANKLIN PARKWAY, SAN MATEO CA 94403-1906
Fred Steven Jensen officer: Chief Compliance Officer LEGG MASON, 620 EIGHTH AVENUE, 49TH FLOOR, NEW YORK NY 10018
Relative Value Partners Group, Llc other: QUALIFIED INSTITUTION MANAGER 1033 SKOKIE BLVD., SUITE 470, NORTHBROOK IL 60062
Daniel P Cronin director 235 EAST 42ND ST, NEW YORK NY 10017
Christopher Berarducci officer: Treas/Principal Finan Officer LEGG MASON, 620 EIGHTH AVENUE, NEW YORK NY 10018
Nisha Kumar director 1735 MARKET STREET, 32ND FLOOR, PHILADELPHIA PA 19103
Jennifer S Berg officer: Treasurer 100 INTERNATIONAL DRIVE, 7TH FLOOR, BALTIMORE MD 21202
Todd F Kuehl officer: Chief Compliance Officer 1555 PEACHTREE STREET NE, ATLANTA GA 30309
Kenneth Fuller director, officer: CEO, Pres. & Chairman, other: CEO & Pres. Of Manager 620 EIGHTH AVENUE, 49TH FLOOR, NEW YORK NY 10018
Thomas C Merchant other: Director of Subadviser LEGG MASON, INC., 100 INTERNATIONAL DRIVE, BALTIMORE MD 21202