text: Interest is most certainly a cash expense.  The reason you add interest expense back is to compare apples to apples.  The simplified cash flow calculation is Net Income plus Interest Expense plus Depreciation Expense (there also might be some other oddball add-backs which I will ignore).  Now you can compare cash flow to principal and interest payments.\n\nIf you didn't add back interest, you would be double counting.\n\nHope this helps.