Cash Flow Return Definition
The cash flow return (CFR) is a metric used to evaluate the performance of a company or investment. The CFR measures the percentage of cash that is returned to investors after all expenses are paid. This metric is also known as the cash-on-cash return.
To calculate the CFR, divide the net operating income by the total cash invested. For example, if a company has a net operating income of $100,000 and total cash invested of $1,000,000, then its CFR would be 10%.
The CFR is often used to compare different investments. It can also be used to measure the performance of a company over time. For instance, if a company’s CFR decreases from one year to the next, it may be an indication that it is not performing as well as it once was.
