Funds from operations (FFO)is a measure of revenues generated by REITs, and it is used to define the cash flows that REITs generate from their operations. It is calculated by adding the depreciation and amortization to the net income and then deducting any gains on the sale of properties. H...
Investors who want to estimate the value of a real estate investment trust (REIT) will find that traditional metrics such as earnings-per-share (EPS) andprice-to-earnings (P/E)do not apply. A more reliable method is a figure calledfunds from operations (FFO).Here's what you need to kn...
How to Calculate Cap Rate For example, you’re at a local real estate meet-up, and someone presents you with an off-market deal. “This won’t last long. It’s priced to sell. You better jump on it!” they say. It sounds great. But is itreallya good deal? Here’s where you ...
How to Calculate Working Capital The working capital formula subtracts your current liabilities (what you owe) from your current assets (what you have) in order to measure available funds for operations and growth. A positive number means you have enough cash to cover shor...
To calculate your working capital, you’ll need to know what your current assets and liabilities are. Current assets Current assets refer to a business’ cash and the assets that can be converted into cash within 12 months. When you look at a business’ balance sheet, you’ll find its liq...
How to calculate total loan costs The total cost of a loan depends on theamount you borrow, how long you take to pay it back and theannual percentage rate. The APR is the most important factor — it reflects the total amount you’ll pay for borrowing money. This includes the interest ...
risk tolerance, along with the time and desire to research individual stocks (and to learn how to do it right), that could be the best way to go. If you have a low risk tolerance but want higher returns than you'd get from a savings account,(or bond funds) might be more ...
The FCF ratio measures the free cash flow per share a business is expected to generate compared to its market value per share. How do I calculate free cash flow? For calculating free cash flow, use the following formula: Free cash flow = Cash from business operations - Capital expenditures ...
For real estate investment trusts (REITs), standard metrics like earnings per share (EPS) or price-to-earnings (P/E) ratios may not deliver the most accurate picture you need of performance and value. Instead, professionals often turn to funds from operations (FFO) and adjusted funds from op...
While there are various ways to measure capital employed, the simplest formula is to calculate total assets minus current liabilities. Capital Investments Acapital-employedanalysis provides useful information about how management invests a company's money. However, it can be problematic to define...