This is a figure used by REITS to determine the cash flow from their operations. This ratio highlights the amount of cash created by a company’s real estate portfolio comparable to the total operating cash flow. To calculate for the FFO, add the net income to the depreciation and amortization and then exclude the gains (or losses) from the sales of property.
Funds from Operations (FFO)
This is a figure used by REITS to determine the cash flow from their operations. This ratio highlights the amount of cash created by a company’s real estate portfolio comparable to the total operating cash flow. To calculate for the FFO, add the net income to the depreciation and amortization and then exclude the gains (or losses) from the sales of property.
